Suncor Energy Inc. is confident it will return to Libyan soil when it is safe, but does not know how its operations have fared after a six-month civil war.
Canada’s largest energy company has not been able to keep track of its Libyan operations, which include assets of nearly $1-billion, since it shut down last spring, chief executive officer Rick George said on Tuesday at an investor conference in New York.
“We do not know the shape, the conditions of the [Libyan]fields,” he said. “We do get some scattered reports, but [they are]not very reliable until we get people on the ground.”
But he is “certain” the Calgary-based company will return. “I really like where we are in the Sirte basin. This is a very prolific basin. We are in a great position.”
Suncor’s Libyan effort has been the most problematic project it inherited when it swallowed all of Petro-Canada two years ago. The merger, spurred by Suncor’s need to tidy up its balance sheet and desire to expand its stake in the oil sands, came with assets in volatile parts of the world that many investors disliked when they were under Petro-Canada’s control.
Now, rather than working solely in the relatively predictable oil sands and dealing with stable governments in Ottawa and Edmonton, Mr. George is in the dark on some of Suncor’s projects.
Suncor had a joint venture agreement with Libya’s state-controlled oil company and produced about 35,000 barrels of oil per day before its operations were shuttered. “There’s a lot of upside in Libya, and if we get a government that actually wants to work with the industry … then I think for us it is about driving shareholder value.”
The Calgary-based oil company, which also has natural gas assets in Syria, took a $514-million write down on its Libyan assets earlier this year due to an accounting change and uncertainty in that country, and now values the projects at $400-million on its books.
“We’re sure the value of that is much higher,” Mr. George said.
The company’s Syrian assets are faring better than those in Libya. The natural gas it produces there is used within the country, and therefore not subject to the energy export sanctions the European Union imposed on the country Friday.