OUR GREAT MINDS

    by Diane L.M. Cook

    Suncor Energy Leading the Way in Alberta Oil Sands

    Suncor Energy has come a long way from its early years in 1917 when its US-parent company, Sun Company, first started business in Canada supplying lubricating oils, kerosene, and spirits to war plants in the Montreal, Quebec area.Today, Calgary-based Suncor is Canada’s premier integrated energy company, the fifth largest North American energy company by market capitalization, and one of the largest independent energy companies in the world.

    Canada’s Athabasca oil sands

    Suncor’s core business is the development of Canada’s Athabasca oil sands, located in Northern Alberta, Canada. The Company currently operates two mines – Steepbank and Millennium – located east of its main upgrading facilities, north of Fort McMurray. The Company is also in the process of reviewing the timing and sequencing of two additional mining projects, the Voyageur South and the Fort Hills projects. Suncor’s in situ oil sands operations include MacKay River and Firebag. Both developments use steam-assisted gravity drainage technology (SAG-D).

    Natural Gas Exploration

    Suncor is involved in natural gas exploration and development in Western Canada, which provides the company with a price hedge against internal consumption at its oil sands and refining operations. Its International and Offshore business consists of operations in the North Sea, Libya and Syria, and off Canada’s east coast – where the company has an interest in every major producing oil development.

    With a refining capacity of 433,000 barrels per day and a large retail network, Suncor’s Refining and Marketing business connects the company’s core oil sands business with a growing North American energy market. In addition, the company invests in renewable energy opportunities. Renewable energy plays include four wind power farms with a generating capacity of 147 megawatts and Canada’s largest ethanol plant by volume, with a current production capacity of 200 million litres per year.

    Over the next decade, Suncor plans to grow its production by 7% to 8% per year company- wide, while continuing to build its position in a growing renewable energy market and invest in new technologies to improve its environmental performance.

    Merger with Petro-Canada

    “As a result of the merger with Petro-Canada, we now have a larger suite of high-quality growth options, the strongest position in the oil sands industry and a greater ability to invest and grow through the commodity price cycle,” says Rick George, president and chief executive officer. “So what’s coming is a period of significant growth, but our future plans will also be about growth in a disciplined fashion.” George explains that the company will focus its investments toward those projects that have the highest expected return on capital, near-term cash flow and lowest risk, and that it will proceed with “the right project, at the right time, and in the right way”.

    $5.5 billion capital expenditure

    In November 2009, Suncor announced a $5.5 billion capital expenditure plan for 2010, and with that, the company resumed construction of its Firebag Stage 3 in situ oil sands project. The expansion is expected to achieve first production during the second quarter of 2011, with volumes ramping up over an estimated 18-month period toward a planned production capacity of approximately 62,500 barrels of bitumen per day.

    Firebag Project

    In March 2010, Suncor received regulatory approval to develop the next three stages of its Firebag project. Firebag Stages 4, 5, and 6 each have a planned production capacity of approximately 62,500 barrels per day. Engineering and planning activities for Firebag Stage 4 are currently taking place to support a target of first bitumen production in the fourth quarter of 2012. Work is also underway on an extension to the White Rose offshore oilfield project in the East Coast of Canada and the company recently announced the completion of its Ebla gas development in central Syria.

    Production from the Ebla gas project was introduced into the Syrian gas network in March 2010 and first commercial gas was delivered on April 19, 2010. The facility has a planned production capacity of 80 million cubic feet per day of natural gas in addition to related liquefied petroleum gas and condensate volumes.

    As for its renewable energy plays, Suncor is currently expanding its St. Clair Ethanol Plant, doubling plant capacity to 400 million litres per year. Construction is expected to be complete at the end of 2010. The company is also looking into a number of potential wind farm locations to build on its wind energy portfolio.

    As an energy giant, Suncor strives for responsible development. The company is seeking ways to address global environmental issues such as greenhouse gas emissions and regional issues such as land use, reclamation, water use, and air quality.

    Innovative technologies to improve environmental performance and reduce impacts on air, land, and water are a key component of Suncor’s responsible development platform. “We remain committed to a set of goals and values that guide our business decisions. Central to this is the principle of a triple bottom line, which means managing our operations and growth plans in a way that enhances social and economic benefits while striving to minimize the environmental impact associated with resource development,” says George.

    Billion Dollars to Deploy New Tailings

    Suncor plans to spend more than a billion dollars to deploy new tailings technology, which the company believes has the potential to reduce tailings reclamation time by decades. “This would represent a step change in addressing one of the biggest environmental challenges facing our industry,” says George. Other initiatives include implementing a new water management plan with the aim of becoming the industry’s lowest intensity water user; continuing to develop cost-effective options for carbon capture and storage technology; investing in renewable energy and investigating emerging technologies such as geothermal energy and petroleum coke gasification, which have the potential to improve energy efficiency and reduce greenhouse gas emissions.

    Suncor’s strategy for the future includes disciplined growth with a focus on operational excellence and responsible development of resources. The company believes there is a “century of opportunity” ahead of itself and George says, “We’re ready for the challenge.”

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