"We are making significant progress on our plans to expand our business," said Rick George, president and chief executive officer. "The focus on growth projects in our 2006 capital budget underlines the wealth of opportunities available to us."
Approximately $2.5 billion of the budgeted spending is planned for Suncor's oil sands operations. Of this investment, about $700 million is slated to be spent on sustaining capital with the remainder, approximately $1.8 billion, earmarked for growth. Oil sands growth projects support the company's goal of increasing production capacity to 350,000 barrels per day (bpd) in 2008, while laying groundwork for further expansion later in the decade.
Capital spending of approximately $325 million is planned for the company's natural gas business to maintain existing operations and support the company's goal of expanding production by 3% to 5% per year.
In Suncor's Canadian downstream operations, plans call for $350 million to be spent in 2006, primarily aimed toward completing modifications to the Sarnia refinery to meet low-sulphur fuels regulations in effect in 2006 and enabling the refinery to process oil sands sour crude blends in 2007. Capital spending is also allotted for an ethanol facility, expected to be completed in mid-2006.
In the United States, capital spending of about $225 million is planned. In 2006, this business is expected to complete modifications to Suncor's Denver refinery to meet low-sulphur fuels regulations and expand the facility's capacity to process oil sands sour crude blends. Planned capital spending reflects an increase in the total project budget to US$390 million (approximately Cdn$465 million) from earlier estimates of US$300 million (approximately Cdn$360 million), due to labour shortages and material supply issues.
While working to responsibly develop hydrocarbon resources, Suncor is also investing in clean, renewable energy sources. Spending of approximately $50 million is planned to support wind energy development.
"Our capital investment plans remain squarely focused on our integrated business strategy - increasing oil sands production and earning a solid return on our investment," said George, "While we plan to invest for future growth, we remain focused on managing debt and maintaining a strong balance sheet."
All financial figures are approximate and in Canadian dollars unless otherwise noted.
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