Rick George, president and CEO of Suncor Energy, waits to address the company's annual meeting in Calgary, Tuesday, May 3, 2011.Jeff McIntosh
Suncor Energy Inc., Canada's largest oil sands company, plans to make "significant investments" in projects off the shores of Newfoundland and Labrador, the United Kingdom, and Norway in 2012.
Meanwhile, Suncor said its 2012 production guidance assumes its Libyan operations, which it, along with its partner, had to shutter during that country's civil war, will not contribute a single barrel of oil next year.
The company expects to spend about $7.5-billion in 2012, with $3.6-billion of that directed toward growth efforts. Oil sands expansions will soak up about 60 per cent of the cash tagged for growth projects, Suncor said in a statement released late Tuesday.
The company's Firebag 4 expansion plan will receive the largest chunk of the money spent on growth. Suncor also plans to spend on its Fort Hills and Joslyn oil sands mining projects and the Voyageur upgrader.
Suncor said that while its "primary growth focus remains largely" on its oil sands plays, more than $1.1-billion will be handed to its exploration and production division. The company plans to spend over half of that money on new developments in the U.K.'s North Sea, Canada's Hebron operation, and exploration in Norway's waters.
The oil sands giant inherited the offshore assets when it swallowed Petro-Canada in 2009. While Suncor has sold some Petro-Canada assets that did not fit with its plans, it held on to the offshore because they provide a stable source of cash that is helpful in funding its megaprojects in Alberta's north.
"Investment in high return projects in our exploration and production business supports our long-term growth plans by maintaining a low-cost, high cash flow source of production," Rick George, Suncor's chief executive, said in a statement. Suncor predicts its 2012 budget will be funded by its cash flow.
Suncor expects to produce between 530,000 and 580,000 barrels of oil per day in 2012. Of that, between 325,000 and 355,000 barrels will come from its oil sands operations, excluding its stake in Syncrude. Suncor said its forecast "assumes no production" from its assets in Libya in 2012.
"[Suncor]is cautiously optimistic about a return to operations in Libya as it formulates a re-entry plan and cooperates with the joint venture operator, who is working to re-establish reliable production," the statement said.
In September, Abdulwahab Elnaami, the chairman of joint venture Suncor has with the Libya, said the project could reach its full potential of 100,000 barrels a day by the end of the year.
Carrie Tait