Suncor writes down ‘challenged’ upgrader

By OGJ editors

Suncor Energy has written down most of the carrying value of the planned Voyageur upgrader near Fort McMurray, Alta., describing the project as “challenged.”

The company, operator of the Voyageur project in partnership with Total E&P Canada, took a $1.487 billion net after-tax impairment against fourth-quarter 2012 earnings.

The charge resulted in a fourth-quarter loss for the company of $562 million, compared to a $2.65 billion profit in the fourth quarter of 2011. After the writedown, the carrying value of net assets related to Suncor’s Voyageur interest as of Dec. 31 was about $345 million.

The Voyageur upgrader is to handle bitumen from the planned Fort Hills oil sands mine operated by Suncor and Joslyn mine operated by Total E&P Canada. It is to be able to process 296,000 b/d of bitumen and yield 218,000 b/d of synthetic crude oil, according to a project description on Total E&P Canada’s web site.

The companies formed a joint venture in 2010 to share interests in the mines and upgrader and to develop the Fort Hills and Voyageur projects in parallel (OGJ Online, Dec. 20, 2010).

“Suncor's view is that the economic outlook for the Voyageur upgrader project is challenged,” Suncor said in its fourth-quarter earnings release. Suncor and Total, it said, have been considering options for the upgrader, “including the implications of cancellation or indefinite deferral.”

Suncor said the partners hope to make a decision by the end of the first quarter. It noted that the project can’t proceed without the approval of both partners, which “have agreed to minimize expenditures on the project pending a decision.”

Total E&P Canada’s parent, Total, hasn’t yet reported fourth-quarter results. 

Related Articles

INTERNATIONAL BRIEFS

01/01/1990 WESTCOAST ENERGY INC., Vancouver, B.C., agreed to buy the utilities and propane business of Inter-City Gas Corp. (ICG), Winnipeg, Man., for $720 mi...

OWNERSHIP QUESTIONS CAN STYMIE DEVELOPMENT OF COALBED METHANE

01/01/1990 Although the technology exists for commercial recovery of coalbed methane, production has been hindered because of the legal quandary as to ownersh...

OGJ NEWSLETTER

01/01/1990 Will oil price stability dominate the 1990s? Analyst Philip Verleger thinks so. Using a measure of market concentration the U.S. government uses t...

U.S. BRIEFS

01/08/1990 PLAINS PETROLEUM CO., Lakewood, Colo., plans further seismic work to define step-out locations to its Minnelusa strike in the Powder River basin in...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected