Skip to main content
The Globe and Mail
Get full access to globeandmail.com
Support quality journalism
Just $1.99 per week for the first 24weeks
Just $1.99 per week for the first 24weeks
The Globe and Mail
Support quality journalism
Get full access to globeandmail.com
Globe and Mail website displayed on various devices
Just$1.99
per week
for the first 24weeks

var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){console.log("scroll");var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))}pencilInit(".js-sub-pencil",!1);

Oilsands giant Suncor Energy Inc. is putting projects on hold and cutting its 2020 capital budget by 26 per cent to deal with lower oil prices linked to a market share battle between Saudi Arabia and Russia, as well as lower demand for fuel because of the COVID-19 pandemic.

The Calgary-based producer, refiner and operator of Petro-Canada service stations is slashing its 2020 capital spending budget by $1.5 billion to a range between $3.9 billion and $4.5 billion.

“The simultaneous supply and demand shocks are having a significant impact on the global oil industry,” said Suncor CEO said Mark Little in a statement late Monday.

Story continues below advertisement

“We are adjusting our spending and operational plans to be prepared in the event the current business environment persists for an extended period of time.”

The company’s shares rose by as much as 9.9 per cent to $16.94 in Toronto on Tuesday morning. They were trading at more than $40 per share late last month.

Suncor’s cuts follow billions in spending reductions by other major oilsands players including Canadian Natural Resources Ltd., Cenovus Energy Inc. and Husky Energy Inc.

Suncor also reduced its 2020 production guidance by 60,000 barrels of oil equivalent per day to about 760,000 boe/d, in part to account for a plan to go to one production train from two at its Fort Hills oilsands mine and a deliberate delay in returning its MacKay River thermal oilsands project to service following repairs until May because of low bitumen prices.

“Overall, the corporate update shows more aggressive reductions in capex and production than we had made in our preliminary estimate adjustments a couple weeks ago,” said CIBC analyst Jon Morrison in a report.

“Albeit, this is unsurprising as the macro market has deteriorated since that time.”

As a result of spending deferrals, Suncor is pushing back its medium term target of adding $2 billion in incremental annual free cash flow improvements from to 2025 from 2023.

Story continues below advertisement

Suncor says some projects are being shelved for up to two years, including a $1.4-billion plan announced in September to install two cogeneration units at its Oil Sands Base Plant in northern Alberta that would have reduced greenhouse gas emissions.

The company is also halting work on a new $300-million wind power plant in southern Alberta approved in December.

On Sunday, Husky announced it would suspend major construction work on the West White Rose Project off Newfoundland.

Suncor has a 26 per cent interest in the project, which is about half completed and was expected to produce 75,000 barrels per day of oil when on stream in 2022.

Construction of connecting pipelines to enhance synergies between Suncor’s Base Plant and nearby Syncrude oilsands operations are to proceed, along with the deployment of driverless haul trucks at Fort Hills.

Suncor says it will reduce total operating expenditures across the business by more than $1 billion this year, versus $11.2 billion of expenditures in 2019, without saying what affect that will have on its workforce.

Story continues below advertisement

It said it expects generally lower demand for its refined products but has not yet adjusted guidance because of “significant uncertainty” as to how far demand will fall.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies