Suncor takes next step in Alberta oil sands growth

Gary Park, Petroleum News Calgary correspondent

Pioneer oil sands developer Suncor Energy, with its costs under control and fears of Kyoto Protocol fallout easing, is seeking regulatory approval for a C$3 billion expansion to boost output to 330,000 barrels per day by late 2007.

Chief Executive Officer Rick George said April 3 that the latest phase is “one more step on the journey” to Suncor’s goal of 500,000 to 550,000 barrels per day of production by 2010-2012.

He said the integrated company wants to become the “largest supplier of oil sands products and the lowest cost oil producer in North America.”

Among its objectives are a return on capital of at least 15 percent based on oil prices of US$22 per barrel and cash operating costs of C$10-$11 per barrel.

The initial C$600 million phase of its Firebag project is 80 percent complete and, more importantly for Suncor, on budget.

Its Project Millennium expansion, completed in late 2001, rattled the company with a series of cost overruns that pushed the price tag to C$3.4 billion from C$2 billion.