Canada’s largest energy company Suncor Energy Inc. (SU) recently unveiled its ten-year business strategy.
In particular, the firm outlined plans to increase production to more than 1 million barrels of oil-equivalent per day (MMBOE/d) by 2020. Suncor sees oil sands production to grow by 10% and company-wide production to grow by 8% in each of the next ten years.
Growth will mainly come from Suncor’s in situ projects (Firebag Stages 3 through 6 and the second stage of MacKay River ), investments, as well as ongoing production in international and offshore operations. The C$1.75 billion strategic partnership with French oil major Total SA (TOT), to jointly develop the Fort Hills and Joslyn oil sands mining projects, will also play a critical role.
(Read our full coverage on the Suncor, Total agreement: Total and Suncor in Tactical Deal)
To help fund the initial stages of its ambitious plan, the Calgary, Alberta-based company is slated to invest C$6.7 in 2011. Of the total capital expenditure, C$2.8 billion (or about 42%) will be allocated to growth projects – primarily at the company’s oil sands operations – and the remaining portion (C$3.9 billion, or about 58%) will go towards sustaining existing operations, including planned maintenance of facilities and further deployment of new tailings reclamation technology.
Suncor Energy is Canada’s premier integrated energy company. Suncor’s operations include oil sands development and upgrading, conventional and offshore crude oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand.
Suncor Energy currently retains a Zacks #3 Rank, translating into a short-term ‘Hold’ rating. We are also maintaining our long-term ‘Neutral’ recommendation on the stock.
SUNCOR ENERGY (SU): Free Stock Analysis Report
TOTAL FINA SA (TOT): Free Stock Analysis Report
Zacks Investment Research
