Suncor, Calgary, has cut its 2020 capital program by $1.5 billion (Can.), or 26% compared to the original 2020 capital guidance midpoint, to $3.9-4.5 billion (Can.), in response to the decline in the crude oil price and uncertainty of the economic impact of COVID-19.
The updated capital spend includes $2.3–2.7 billion (Can.) allocated to asset sustainment and maintenance activities; $600–750 million (Can.) on E&P step out developments; and $1 billion (Can.) on high return/cost reduction projects largely independent of commodity price volatility.
Suncor’s original capital guidance was $5.4-6.0 billion (Can.), with nearly 50% allocated to economic investment and 50% to sustaining capital. By the end of this year’s first quarter, the company is expected to have spent $1.3 billion (Can.).
To reduce the budget, Suncor is targeting a combination of economic investment reductions and deferral and cancellation of projects.
The Syncrude/Suncor interconnecting pipelines, deployment of autonomous haul trucks at Fort Hills, and investments in technology for the Supply and Trading business and core business systems will continue to be funded and proceed on schedule.
The Cogeneration Facility at Base Plant, Forty Mile Wind project, and some offshore E&P step out development timelines have been extended for up to 2 years. Husky Energy, operator of the West White Rose project, has suspended work for an indefinite period. Suncor also has deferred new in-situ well pads until conditions improve and cancelled several small economic investment projects across the business.