Major Portion of Suncor's 2003 Budget for Oil Sands Project

Suncor Energy Inc. announced that its capital spending estimate for 2003 is $1.05 billion, with the majority of the investment allocated to the company's oil sands business.

"Our capital spending plan illustrates that Suncor remains keenly focused on well-managed and predictable oil sands growth," said Rick George, president and chief executive officer. "Capital investment in 2003 supports our plan of increasing oil production to half a million barrels per day over the next 10 years and achieving our goal of becoming one of the lowest cost oil producers in North America."

Approximately $496 million of the announced 2003 capital spending is budgeted for oil sands growth projects. This includes spending to support stage 1 of the Firebag In-Situ Oil Sands Project, as well as construction of a new vacuum unit for Suncor's upgrader. Combined, the two projects are expected to increase Suncor's oil sands production capacity to 260,000 barrels per day in 2005.

An additional $215 million investment will be directed to maintain competitive oil sands operations. This investment will be used to finance strategic and sustaining capital projects, including a spring maintenance shutdown to one of the company's two oil sands upgraders.

Suncor's Energy Marketing and Refining business plans to spend $145 million in 2003. The bulk of these funds will be allocated towards projects at the company's Sarnia Refinery, ensuring it meets pending gasoline and distillate desulphurization initiatives and integrates production streams from Suncor's oil sands facility. Increased funds will also be available to grow Sunoco's retail network and maintain its competitive position in the Ontario marketplace.

Suncor's Natural Gas business expects to spend $160 million to support the company's goal of profitably growing natural gas production, while the remaining $35 million in Suncor's capital spending budget is planned to support technology upgrades and investment in renewable energy.

Suncor's total production goal for 2003 is to achieve rates of nearly 250,000 barrels of oil equivalent per day. This represents an average production of 215,000 barrels per day from the company's oil sands operation, and about 210 million cubic feet equivalent per day from Suncor's natural gas business.

While the company's growth plan is on track, debt reduction remains a priority for Suncor. "Our target is to reduce debt to $2.4 billion by the end of 2003," said George.