Oilsands giants’ spending outlook differs

Cenovus Energy, Suncor Energy despell investment rumours

CALGARY — Two of Canada’s richest oilsands companies presented very different spending outlooks Thursday, with Cenovus Energy indicating it is looking farther afield to add refining capacity and Suncor Energy dousing speculation it is planning a buying spree.

Suncor (TSX-SU), which has access to $3.1 billion in cash and $6.7 billion in unused credit, is focused on returning money to investors through higher dividends and share buybacks rather than investing in growth, CEO Steve Williams said on a conference call to discuss third-quarter results.

He said he wanted to be “crystal clear” in dispelling investment community rumours about what Suncor might be looking to buy or sell.

“We have never considered a transformational deal in the North Sea. Period,” he declared.

“We are not, and I’ll repeat that, not marketing our retail (Petro-Canada service station) assets. And we are not, and I’ll repeat that again, not currently involved in any sales process for a refinery.”

Cenovus CEO Brian Ferguson, meanwhile, said on a separate conference call his company — which has about $3.9 billion in cash and $4 billion in unused credit — wants to add refinery capacity to more closely match its oilsands production. He said refining capacity has fallen to between 50 and 60 per cent of production.

In a later interview, he said Cenovus can add that capacity without buying anything, possibly through American partner Phillips 66, with which it currently owns refineries in Illinois and Texas.

Ferguson said Cenovus is preparing cost estimates for a deferred 50,000-barrel-per-day expansion at its Christina Lake oilsands project in northern Alberta for consideration in its 2017 budget.

Suncor confirmed Thursday that it has begun marketing its stakes in three “non-core” wind power assets in Ontario — at Ripley, Strathroy and Forest. It expects to gain $275 million from a sale within the next 12 months. Its interests in two wind power projects in Alberta and one in Saskatchewan aren’t on the block.

The company earlier raised $500 million by selling a half interest in the storage tank farm it’s building for its $15-billion Fort Hills oilsands mining project.

Fort Hills is 70 per cent complete, Suncor said. It is expected to begin producing oil by the end of next year and ramp up to 180,000 bpd capacity throughout 2018, on schedule and budget despite a one-month construction site shutdown due to the Fort McMurray wildfires in May.

Alister Cowan, Suncor Energy’s chief financial officer, announced that the company is pegging capital spending next year at about $5 billion, down from about $5.9 billion this year.

Cenovus reported a $236-million operating loss for the third quarter compared with an operating loss of $28 million in the same period last year.

Suncor posted operating earnings of $346 million, down from $410 million in the third quarter of 2015.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

COVID-19: First death confirmed in central zone, provincial cases reach 1,250

Alberta government confirmed a first death in the central zone Sunday. The… Continue reading

COVID-19 case reported at supermarket in Wetaskiwin

Sobeys will not release names to protect employees

WATCH: Red Deer emergency call centre hours change starting next week

Hours at the City of Red Deer’s COVID-19 emergency call centre will… Continue reading

Alberta Health Services provides COVID-19 prevention tips

Alberta Health Services has a number of recommendations for people amid the… Continue reading

Alberta government website has latest COVID-19 statistics

Red Deer Advocate readers can stay up to date on the COVID-19… Continue reading

Quebec Walmart worker struck by driver allegedly angered by COVID-19 measures

SHERBROOKE, Que. — A Walmart security guard from southern Quebec was fighting… Continue reading

Boeing to continue production shutdown due to coronavirus

Company is extending its planned two-week shutdown

Bars, cannabis sector eligible for $40B credit program from government bank

Applicants must go through their own banks to access the program

Actress-activist Shirley Douglas, daughter of medicare’s Tommy Douglas, dies

‘Sadly she had been battling for her health for quite some time’

Canada looking to disinfect used masks, Tam asks they not be thrown away

Best defence against COVID-19 is to stay home as much as possible, wash their hands frequently

With workers at home, feds eye ways to fast-track training program, groups say

How to help workers stuck at home or out of work to prevent their skills from becoming

Most Read