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The Suncor mine facility along the Athabasca river as seen from a helicopter tour of the oil sands near Fort McMurray, Alta., Tuesday, July 10, 2012.Jeff McIntosh/The Canadian Press

Suncor Energy Inc., Canada's largest energy outfit, has approved plans to build a new $13.5-billion oil sands mine – a decision that comes after years of delays.

The company said it and its two partners will proceed with their proposed Fort Hills mine, Suncor said late Wednesday. The project was iced when the financial crisis hit the market in 2008. Rising costs also played a role in shelving the project.

Suncor expects to squeeze out the first drops of oil from Fort Hills in the fourth quarter of 2017 and hit 90 per cent of its production capacity of 180,000 barrels of bitumen per day within 12 months. Suncor's slice of the bill is $5.5-billion, it said, expecting that to account for about 15 per cent of its capital budget on average per year.

"The Fort Hills economics are positive," Steve Williams, Suncor's chief executive, said in a statement. "Great effort has been made to ensure that our depth of experience and recent technology improvements in oil sands mines are integrated into the development of the project."

Suncor owns 40.8 per cent of Fort Hills, France's Total SA holds 39.2 per cent, and Teck Resources Ltd. has a 20 percent stake. As a result, Suncor's slice of Fort Hills' production equates to about 73,000 barrels of bitumen per day. Suncor inherited Fort Hills when it bought Petro-Canada in 2009.

Imperial Oil Ltd., which is controlled by Exxon Mobil Corp., just fired up its $12.9-billion Kearl oil sands mine. Open pit mines come with significant upfront costs because their stages are much larger than those in steam-assisted gravity drainage projects, which use wells to extract bitumen.

The Fort Hills announcement just before Suncor trimmed its production forecast and lowered its 2013 budget.

The company, which has assets around the world, predicts it will produce between 545,000 and 590,000 barrels of oil equivalent per day in 2013. This is down from its previous expectation of between 570,000 and 620,000 barrels of oil equivalent per day.

Suncor said three factors are responsible for the revised forecast: its shut-in production in Libya, prompted by labour disputes and political unrest; reduced production from its North American onshore business because it sold a large portion of its natural gas division in September; and decreased production at Syncrude Canada Ltd., the oil sands mining consortium, thanks to mechanical troubles. Suncor owns 12 per cent of Syncrude and does not operate the mine.

Suncor trimmed its budget by $300-million, down to $6.7-billion in 2013. The budget was lowered because of "project prioritization" that meant Suncor deferred some of its planed spending as well as lower cost estimates from "scope optimization" in exploration and production, the company said in its third-quarter results.

Suncor said "reductions to the unallocated discretionary growth capital pool" in corporate, energy trading and elimination, also contributed to the lower budget.

Suncor earned $1.69-billion or $1.13 per share in the third quarter, up from $1.544-billion or $1.01 per share in the same frame last year.  Its operating earnings reached $1.42-billion or 95 cents per share in the third quarter, up from $1.29-billion or 84 cents per share in the same quarter of 2012. The company credited these results to "record production" and better prices for western Canadian crude oil.

Suncor's cash flow from operations, which is used as a guideline to measure how well a company can fund its projects, hit $2.52-billion or $1.69 per share in the quarter. This compares to $2.74-billion or $1.79 per share in the third quarter last year.

RBC Dominion Securities Inc. analyst Greg Pardy in a note published Wednesday evening called the Fort Hills announcement and Suncor's financial results "neutral."