The head of Suncor Energy says it is difficult to see the company starting any new major growth projects given the current economic environment in the oilpatch.
Steve Williams, CEO of Canada’s largest oilsands company, told investors during a conference call Thursday that Suncor will not return to how it once operated.
Suncor is working towards finishing the $13.5−billion Fort Hills oilsands project that it half owns and the $14−billion Hebron East Coast offshore project in which it has a 21 per cent stake.
Together they should add about 123,000 barrels a day of oil production to the company. But after that, Suncor expects to take a step back.
"We’ve got two major growth projects coming to a conclusion, (but) it is difficult in the current economic environment to see how you would approve those types of projects," said Williams.
"You will see us taking a breath around growth projects, because what the market is offering is cheaper alternatives in terms of buying capacity, so there isn’t a go back to how we were," he said.
The company announced late Wednesday that it was buying a five per cent additional stake in the Syncrude oilsands project for $937 million from Murphy Oil Corp., bringing Suncor’s stake to 54 per cent and giving it majority control.
However, Williams said Suncor is in no rush to use its majority to take over the operator’s role from Imperial Oil Resources.
He said Suncor will continue to focus on lowering costs as it ramps up daily production from roughly 691,000 barrels of oil equivalent a day in the first quarter to in excess of 800,000 barrels in 2018 after Fort Hills and Hebron come online.
Overall Suncor says it is targeting $500 million in cost savings this year, on top of the $1 billion in cost savings it achieved last year.
The company is also considering selling off assets of between $1 billion and $1.5 billion in the next year or so, with Williams saying selling its retail gas business is a possibility.
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