Suncor announces C$5.5 billion spending plan

Suncor, CanadaÔÇÖs largest energy company, has unveiled a 2010 capital spending budget of C$5.5 billion, up from this yearÔÇÖs C$3 billion.  Almost C$1.5 billion will be directed to fund growth projects, while the remainder will be spent on sustaining current production operations. Suncor has confirmed that C$900 million will be spent on the third phase of the C$5 billion Firebag project, which was only half completed when it was mothballed in January this year.  Firebag uses steam to pump oil out of the ground. The third phase of the project is scheduled to come on stream in mid-2011 with a capacity of 68,000 barrels of bitumen a day.  In addition, the company will spend another C$50 million to target first production from Firebag's phase four, which has the same capacity as phase three, in the fourth quarter of 2012.  The existing Firebag operations produced about 54,300 barrels a day in the third quarter of this year.  About C$390 million will also be spent on oilfields offshore eastern Canada and on operations in Syria and Libya that were previously owned by Petro-Canada, Suncor said.  Suncor has estimated that its projects can produce a 15 percent return at a crude oil price of $70 a barrel; and that its oil sands capacity will grow by 10 to 12 percent a year over the next decade.  The company had previously put all capital projects on hold until after the completion of its takeover of Petro-Canada in August for around C$19.6 billion.  The company will continue to wait before sanctioning the 200,000 barrels per day Voyageur upgrader, a plant which had been 15 percent complete at the end of last year; as well as the C$25.3 billion Fort Hills oil sands mine previously owned by Petro-Canada. Suncor has already spent C$3 billion on the Voyageur upgrader. Upgraders convert bitumen into crude oil ready to be shipped to refineries.  The company has said it may consider taking on a partner for the Voyageur project in the future.  Suncor is currently CanadaÔÇÖs biggest Alberta oil sands producer. The region contains estimated reserves of 173 billion barrels of oil, a figure exceeded only by Saudi Arabia.  The company has said that by the end of this year, it will have saved about C$400 million through job cuts, product marketing and supply chain optimization.  Measures announced include 1,000 job cuts and the cancellation of a plan for a new 25,000 barrels a day coker at its Montreal refinery.  *┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á *