CALGARY — Suncor Energy Inc. says its on-again, off-again plan to add a coker unit to its Montreal refinery to allow it to process heavier barrels of oil, including oilsands bitumen, is off the table as it shuffles its spending priorities.
On a conference call to discuss fourth-quarter results, CEO Mark Little says the $2-billion project has been shelved as the company focuses on low-cost oilsands expansions, projects to help reduce emissions and digital technology investments to reduce costs.
He says Suncor has also elected to defer sanctioning of its proposed 40,000-barrel-per-day Meadow Creek oilsands project, which would produce bitumen from wells, until 2023 at the earliest.
Instead, it will invest in boosting production from its existing similar Firebag facility to nameplate capacity of 203,000 bpd by 2021 and then potentially add 20,000-30,000 bpd by 2024-25.
The Calgary-based energy giant reported a net loss of $2.3 billion for quarter ended Dec. 31 due mainly to asset impairment charges of $3.3 billion.
That includes $2.8 billion from lower forecast prices for oil from its Fort Hills oilsands mine in northern Alberta and $393 million for higher capital cost estimates for the West White Rose Project off Newfoundland and Labrador, expected to begin producing oil in 2022.
On the conference call, Little said Thursday the company was listening to investors as it aims to generate more free cash flow while keeping spending in check.
“Some of the concern we see from the investors is, ‘Wow, you’re going to plow $2 billion into Montreal, are you sure?,'” he said.
“We spent a lot of time thinking about that and running all the analysis and concluded that actually wasn’t the prudent investment for the shareholder.”
Suncor shares fell by as much as 4.6 per cent in early trading on the Toronto Stock Exchange.
This report by The Canadian Press was first published Feb. 6, 2020.
Companies in this story: (TSX:SU)
The Canadian Press