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Suncor is pressing forward with its $13.5-billion Fort Hills mine in hopes of benefitting from a cooling market for labour and materials in northern Alberta as a result of an industry slowdown.Brian Harder

Suncor Energy Inc. is stepping up efforts to conserve cash and warning of deeper spending cuts, even as it gets set to plow more money into a major oil sands mine.

The Calgary-based company said it halted plans to repurchase shares this year after tumbling oil prices led to fourth-quarter earnings of $84-million, down 81 per cent from the $443-million haul in the same period a year ago.

Executives also warned of $700-million in potential cuts to "discretionary growth capital" and more project deferrals on Thursday. And Suncor said it is no longer shipping crude by rail from Alberta to the U.S. Gulf Coast, saying the once-booming trade is "not economic" at today's low prices.

The moves by Canada's largest integrated oil and gas company are the latest signs of upheaval in the energy sector, which has been rocked by a seven-month rout in oil prices.

In recent years, the volume of crude shipped on North American railways surged to accommodate fast-growing production from Alberta's oil sands and U.S. shale deposits. The business created a windfall for rail companies and gave coastal refineries access to cheaper supplies of landlocked oil.

But the trade has withered amid weaker oil prices. The amount of oil and other petroleum products hauled by Canadian railroads on domestic and U.S. lines fell by 7 per cent last week to about 8,052 carloads, according to the American Association of Railroads.

Canadian Pacific Railway Ltd. and Canadian National Railway Co. have said they expect to move more oil this year as new loading terminals open amid a shortage of pipeline capacity. But CP has cut its expected volume to 140,000 carloads, from 200,000 previously, as oil company shippers slash spending and production.

Suncor said it is still moving crude by rail to its 137,000 barrel-a-day refinery in Montreal, but the shipments are less lucrative.

"I would say that rail into Montreal is marginal and rail to the Gulf Coast is not economic at this point, so we're currently not railing to the Gulf Coast," Steve Douglas, Suncor's vice-president of investor relations, told analysts.

North American and global crude prices jumped on Thursday on renewed violence in OPEC producer Libya and expectations of rising demand in China. West Texas intermediate oil for future delivery climbed 4.2 per cent to $50.48 (U.S.) a barrel. Brent, the international standard, rose 4.5 per cent to $57.57 a barrel.

Still, prices remain well under levels that would support new expansions in northern Alberta's oil sands.

Suncor, which last month slashed $1-billion (Canadian) from its 2015 budget and cut 1,000 jobs, said Thursday it was deferring a final investment decision on a 20,000 barrel-a-day expansion at its steam-driven MacKay River development. The company has also postponed an expansion to its White Rose development off the shore of Nova Scotia with partner Husky Energy Inc.

However, Suncor is pressing forward with its $13.5-billion Fort Hills mine in hopes of benefitting from a cooling market for labour and materials in northern Alberta as a result of an industry slowdown.

The company said it will spend as much as $1.6-billion this year on the project, despite oil prices dropping by more than 50 per cent since last summer and a sharp reduction in corporate profits.

Suncor chief executive Steve Williams said the company had no plans to suspend work on the project, which is due to pump first oil in 2017. Nor will it tap the brakes on Hebron, an Exxon Mobil Corp.-led project offshore Newfoundland and Labrador. A joint venture with Royal Dutch Shell PLC offshore Nova Soctia is also a go, Mr. Williams said.

"You will see us protecting those big strategic growth projects for as long as we reasonably can," he said. "And right now our judgment is that we can still go ahead with those."

With files from Eric Atkins in Toronto