A vibrant energy industry acts as an engine for the larger economy, creating well paying jobs, promoting economic growth, and providing governments and suppliers with valuable revenues.
Suncor marked another pivotal year in 2010. It was the year we fully implemented the successful merger of Suncor and Petro-Canada and began to realize the resulting synergies and savings. It was also the year we launched Suncor on a new decade-long growth plan, expected to double our total production by 2020, while reinforcing our leading position in responsibly developing the Athabasca oil sands.
Suncor’s Growth Strategy
In December 2010, Suncor announced a 10-year growth strategy to increase total production to more than one million barrels of oil equivalent per day by 2020. Of that planned production, it’s expected approximately four of every five barrels will flow from the oil sands.
Suncor’s growth strategy includes continued development of Stages 3 through 6 of the company’s Firebag in-situ, project, a second stage of the MacKay River in-situ project and ongoing production in international and offshore operations. The plan also features a strategic partnership with Total E&P Canada Ltd. (Total), a subsidiary of Total SA and a company with capabilities and resources that complement our own, and one that shares our vision of responsible energy development.
Together, the two companies plan to develop two key oil sands mining projects with other partners—the Fort Hills mine, which is expected to be operated by Suncor, and the Joslyn mine, which is expected to be operated by Total. Together, we are also restarting construction of the 200,000 barrel per day Voyageur upgrader at Suncor’s oil sands operations north of Fort McMurray, Alberta, now slated for completion in 2016.
Suncor is targeting average oil sands production growth of approximately 10% per year and company-wide production growth of approximately 8% per year through to 2020.
The successful implementation of Suncor’s August 2009 merger with Petro-Canada has helped provide a strong foundation for this next chapter in Suncor’s history. By the end of 2010, we had sold approximately $3.5 billion of assets that did not support our long-term strategy, with the net proceeds used to reduce the company’s net debt. The merger resulted in annual capital efficiencies of an estimated $1 billion. Operational synergies, originally targeted at $300 million per year, are now expected to grow to approximately $800 million per year in 2012.
Suncor remains strategically focused on responsibly developing Canada’s oil sands in a way that maximizes benefits for our shareholders and the larger economy. We also remain focused on achieving safe, reliable and cost-effective energy production across all of our operations.
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