Suncor's Postponement of Firebag 3 Project to Impact Flint's Business
Flint Energy Services has analyzed the potential impacts of Suncor Energy's recently announced plans for a reduction in Suncor's capital expenditures on Flint's business for 2009. Suncor is a valued client of Flint's Facility Infrastructure Division. Based on Suncor's announcement, Flint anticipates a possible reduction in 2009 revenues for its Facility Infrastructure division of between $100-$150 million from 2008 levels.
It is anticipated that the greatest immediate impact will be felt as a result of Suncor's decision to postpone completion of its Firebag 3 project in Fort McMurray, Alberta; currently approximately 50% complete. Flint will be working with Suncor as it demobilizes from the project to ensure that the project is left in what has been described as a "safe mode" to preserve and protect the facilities currently fabricated or constructed and to permit future resumption of work on the project.
The Suncor project postponement will result in an immediate layoff of construction workers. Additional layoffs will follow once the project has reached "safe mode."
Work continues on Flint's clients' other oil sands projects, including Albian Sands' Expansion 1, Suncor Firebag's Sulfur Plant, and StatoilHydro's Leismer project.
The Suncor announcement will result in a delay in the realization on Flint's Facility Infrastructure's backlog which stood at approximately $800 million at the end of 2008.
Bill Lingard, President and CEO of Flint said, "This is disappointing news for Flint and our people who have been involved with the project.
However, we recognize and respect the reasoning behind this decision. We are working closely with Suncor to complete all necessary work on the site in preparation for what we hope is a short-run postponement of the project. We are confident that oil sands development will continue, albeit at a reduced pace for now."
The Company further announced that every effort will be made to transfer affected workers to Flint's other projects where their skills are needed. Flint's heavy and specialty hauling business segment within its Oilfield Services division will also be impacted by this announcement, but layoffs are not anticipated at this time.
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