Suncor cancels Voyageur upgrader, buys Total's stake

Suncor Energy Inc., Calgary, has scrapped plans for the Voyageur upgrader project near Fort McMurray, Alta., and has acquired partner Total E&P Canada Ltd.’s interest for $515 million.

The company said the decision “is the result of a joint strategic and economic review launched by Suncor and its joint venture partner Total E&P Canada in late 2012.”

Suncor Energy in February 2013 took a $1.487 billion net after-tax impairment against fourth quarter 2012 earnings. That charge resulted in a fourth quarter loss 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 its Voyageur interest as of Dec. 31 was about $345 million (OGJ Online, Feb. 7, 2013).

On Wednesday the company said that as a result of not proceeding it also expects to incur charges to first quarter 2013 net income and cash flow from operations of $140 million and $180 million, respectively.

Steve Williams, president and chief executive officer, said, “Since 2010, market conditions have changed significantly, challenging the economics of the Voyageur upgrader project. That’s why we undertook a thorough review of the project to determine whether it met our criteria for long-term, profitable growth.

“This decision is in line with our commitment to capital discipline and our stated plan to allocate capital with priority given to developing higher-return growth projects and accelerating the return of cash to shareholders through dividends and share buybacks,” Williams said.

The Voyageur upgrader was 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.

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).

Related Articles

Phillips 66 considers splitter at Sweeny refinery

03/21/2014 Phillips 66 is evaluating the potential for the addition of a condensate splitter near its 247,000-b/d Sweeny refinery in Old Ocean, Tex., just sou...

Second small diesel refinery planned for North Dakota

03/21/2014 Quantum Energy Inc. (QEI), Tempe, Ariz., said it has secured land for the construction of a 20,000-b/d grassroots hydroskimming refinery in North D...

Flint Hills settles Port Arthur pollution case

03/20/2014 Flint Hills Resources (FHR) has reached a settlement with the US federal government to implement innovative technologies to control harmful air pol...

WoodMac: Global ethylene demand, production on the rise

03/20/2014 Ethylene-producing assets that have access to low-cost natural gas feedstocks, such as the ones in North America, will lead the competition in glob...

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