Suncor cuts workforce in billion-dollar cost-reduction plan
Calgary, AB – Suncor Energy has updated its progress on cost-management measures in response to the low crude price environment, as well as provided an update on its operations.
Since the cost-management program was announced in January 2015, the company has made significant progress on its cost-reduction initiatives. Suncor now expects that the $600 million to $800 million in operating budget reductions will be substantially realized in 2015, ahead of the previously projected two-year period. These reductions will begin to be reflected in first quarter costs. As well, the company’s effort to reduce its workforce by 1,000 positions is largely complete.
“Prudent cost management was a central focus for us well before the downturn in crude prices,” said Steve Williams, president and chief executive officer. “It remains so today, and is helping to maintain the strength of our balance sheet and effectively position the company both now and for the future.”
Suncor confirmed it is on track to achieve the $1 billion reduction in its 2015 capital budget, while maintaining progress on key growth projects already in construction, including Fort Hills and Hebron.
“Through the combination of deferring non-essential capital projects and working with suppliers and contractors to improve our capital efficiency, we’ve been able to significantly reduce our spending, while continuing to fund our key sustaining and growth initiatives,” said Williams.
The company also reported strong operational performance to March 31, 2015, including overall daily production averaging approximately 598,000 barrels of oil equivalent per day (boe/d), excluding production from Libya. Production at Oil Sands and In Situ (excluding Syncrude) averaged about 440,000 barrels per day (b/d), including about 346,000 b/d of synthetic crude oil (SCO). The Exploration and Production group produced about 123,000 boe/d for the same period, excluding production from Libya.
Overall production numbers reflected a quarter with high reliability and minimal planned maintenance. In Refining & Marketing, refinery average utilization remained strong at 95%.
“Our journey towards operational excellence continues and we’re encouraged by the results to date,” said Williams. “We will continue to focus on reliable, safe and environmentally responsible operations and delivering value to shareholders.”
Suncor’s 2015 annual corporate guidance remains unchanged and is available on its website at www.suncor.com.