Sun­cor vows more projects in oil­sands

Cal­gary-based firm prom­ises in­vest­ment if new ex­port pipe­lines built in Canada

Calgary Herald - - FRONT PAGE - GE­OF­FREY MOR­GAN Fi­nan­cial Post With a file from The Cana­dian Press gmor­[email protected]­tion­al­ Twit­­of­frey­mor­gan

FORT HILLS, ALTA. Sun­cor En­ergy Inc. says it’s not done build­ing ma­jor oil­sands projects, damp­en­ing wide­spread spec­u­la­tion among an­a­lysts that the Fort Hills project would be the last new ma­jor mine built in the for­ma­tion.

The Cal­gary-based com­pany would “def­i­nitely” build a new oil­sands mine in the fu­ture, Sun­cor’s pres­i­dent and CEO Steve Wil­liams told a busi­ness au­di­ence to mark the of­fi­cial launch of the $17-bil­lion project, built with joint-ven­ture part­ners Teck Re­sources Ltd. and Paris-based To­tal SA.

Al­berta Pre­mier Rachel Not­ley and fed­eral Nat­u­ral Re­sources Min­is­ter Amar­jeet Sohi were also in at­ten­dance.

“The Cana­dian oil­sands are one of the big­gest and best oil re­serves in the world,” Wil­liams said.

“We will open mines,” Wil­liams said, but cau­tioned that it won’t be com­mit­ting to ma­jor min­ing in­vest­ments any­time soon, or at least un­til new ex­port pipe­lines are built in Canada.

The com­pany will make de­ci­sions on its next growth project in the sec­ond half of 2019 or early 2020, Wil­liams said.

For now, the com­pany will fo­cus on phased ex­pan­sions of the com­pany ’s three ex­ist­ing oil­sands mines in Fort McMur­ray. The Fort Hills project cur­rently pro­duces 150,000 bar­rels of oil per day and is ex­pected to ramp up to its full ca­pac­ity of 194,000 bpd by the fourth quar­ter.

The Cana­dian oil in­dus­try’s ef­forts to build new pipe­line projects have been de­railed amid op­po­si­tion from First Na­tions and en­vi­ron­men­tal groups.

Com­pound­ing the prob­lem, a num­ber of ma­jor in­ter­na­tional oil com­pa­nies such as To­tal have ei­ther ex­ited or sig­nif­i­cantly re­duced their stake in oil­sands as­sets due to a com­bi­na­tion of low oil prices, high costs, and pres­sure from en­vi­ron­men­tal groups, sap­ping in­vestor con­fi­dence.

Mean­while, the Trans Moun­tain pipe­line, which the fed­eral gov­ern­ment re­cently bought from Kin­der Mor­gan Inc., suf­fered a set­back in Au­gust af­ter the Fed­eral Court of Ap­peal ruled that In­dige­nous com­mu­ni­ties had not been suf­fi­ciently con­sulted and the Na­tional En­ergy Board should have stud­ied the im­pact of oil tankers on West Coast ma­rine wildlife.

Not­ley and Sohi both re­it­er­ated at the event that the Al­berta and fed­eral govern­ments were com­mit­ted to the pipe­line, which would par­al­lel an ex­ist­ing line from Al­berta to Bri­tish Columbia.

Not­ley said the chal­lenges fac­ing the Trans Moun­tain pipe­line ex­pan­sion shows her prov­ince can do ev­ery­thing by the book and still get short­changed.

While the re­cent rul­ing has pro­voked frus­tra­tion and anger in Al­berta, her gov­ern­ment will con­tinue to fight to get it built, as the on­go­ing pipe­line bot­tle­necks is cost­ing the prov­ince $40 mil­lion a day, she said.

While the Al­berta gov­ern­ment does not have stand­ing to launch an ap­peal to the Supreme Court on its own, if an ap­peal is filed to the Ap­peal Court rul­ing, then Al­berta would im­me­di­ately ap­ply for in­ter­vener sta­tus, she said.

“They’re con­sult­ing with their lawyers, we’re con­sult­ing with our lawyers, we’re try­ing to make sure we have the most se­cure and re­li­able path for­ward,” Not­ley said at the Fort Hills project open­ing.

Sohi noted that the fed­eral gov­ern­ment is mulling an ap­peal, new leg­is­la­tion and other steps but said a de­ci­sion has not been reached.

“We also be­lieve in mov­ing for­ward on this project in a timely fash­ion and un­der­stand the ur­gency of it,” Sohi said.

“We do not want to make a de­ci­sion in haste that will get us into the same po­si­tion as we are in to­day.”

The Cana­dian oil­sands are one of the big­gest and best oil re­serves in the world . ... We will open mines.


Sun­cor CEO Steve Wil­liams, Al­berta Pre­mier Rachel Not­ley, and Fort McKay Chief Jim Boucher mark the open­ing of the Fort Hills project in Fort McMur­ray, on Mon­day. Wil­liams says the com­pany may de­cide on its next growth project in the sec­ond half of 2019.


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