Suncor Board Okays 2007 Capital Spending Plan
Suncor Energy Inc. said that its Board of Directors has approved the company's $5.3 billion capital spending plans for 2007. Of this total, approximately $4.3 billion, or about 80% of the total capital budget, is expected to be targeted to company-wide growth projects, debottlenecking and productivity improvement in the oil sands business, and exploration and development spending in the natural gas business. Approximately $1 billion will be directed to sustaining existing operations company-wide.
"Our capital spending plans reflect Suncor's significant growth opportunities over the next several years," said Rick George, president and chief executive officer. "As we pursue those opportunities, managing our capital spending to provide a solid return on investment will be of key importance."
Approximately $4.4 billion of the budgeted spending, including growth and sustaining capital, is planned for Suncor's oil sands operations. Of this investment, approximately $900 million is slated to sustaining existing operations, including the planned relocation of mining and extraction facilities to support extended mining areas. Of the remaining $3.5 billion in planned spending, approximately $1 billion is allotted to project spending towards Suncor's goals of increasing production to 350,000 barrels per day (bpd) in 2008, including debottlenecking and productivity improvements, with $2.5 billion directed toward projects to support the company's goal of producing more than half a million barrels per day in the 2010 to 2012 timeframe.
Capital spending of approximately $350 million is planned for Suncor'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 $300 million to be spent in 2007, primarily aimed toward completing modifications to the Sarnia refinery that will enable the facility to process up to 40,000 barrels per day of oil sands sour crude blends. In the company's U.S. downstream operations, capital spending of approximately $100 million (approximately US$85 million) is planned.
While working to responsibly develop hydrocarbon resources, Suncor is also investing in renewable energy sources. Spending of approximately $120 million is planned to support renewable energy development, including construction of the company's fourth wind power project near Ripley, Ontario and planned investment in biofuels.
Suncor expects similar levels of company-wide capital spending over the next several years. However, specific future project budgets, including capital costs for Suncor's planned third upgrader and Steepbank mine extension are subject to regulatory approvals and, subsequent to completion of detailed engineering, Board of Directors' approval, which may impact project scope and costs.
Suncor Energy Inc. is an integrated energy company headquartered in Calgary, Alberta. Suncor's oil sands business, located near Fort McMurray, Alberta, extracts and upgrades oil sands and markets refinery feedstock and diesel fuel, while operations throughout western Canada produce natural gas. Suncor operates a refining and marketing business in Ontario with retail distribution under the Sunoco brand. U.S.A. downstream assets include pipeline and refining operations in Colorado and Wyoming and retail sales in the Denver area under the Phillips 66® brand. Suncor's common shares (symbol: SU) are listed on the Toronto and New York stock exchanges.
Suncor Energy (U.S.A.) Inc. is an authorized licensee of the Phillips 66® brand and marks in the state of Colorado. Sunoco in Canada is separate and unrelated to Sunoco in the United States, which is owned by Sunoco, Inc. of Philadelphia.
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