Suncor's George: Oil sands a long-life, low-risk resource

In addition to its existing oil sands mine and upgrader near Fort McMurray, Alta., Calgary-based Suncor Energy Inc. toward yearend 2003 began in situ production of bitumen with steam-assisted gravity drainage (SAGD) about 25 miles northeast of its existing oil sands plant. Suncor CEO and Pres. Rick George sees the project as the latest element in the company's strategy to focus on an extremely long life, low risk, and relatively low-cost commodity: Canada's massive oil sands resources. Suncor completed construction of the surface facilities and wells in the $460 million first phase of the SAGD Firebag project in 2003 and expects to produce about 35,000 b/d of bitumen by mid-2005. Its long-term goal, after completing three more phases in the project, is to reach a production level of about 140,000 b/d by 2010. Suncor's mining and upgrading operation has 225,000 b/d capacity after the completion in 2001 of a $2.64 billion expansion (Project Millennium). Since its start-up in 1967, the operation has produced almost 1 billion bbl of bitumen; it expects to hit that mark in mid-2005. The product stream marketed from the upgrader consists of 53% of light, sweet oil; 34% light, sour bitumen; and 13% diesel. These are sold mostly in North America. Suncor also produces natural gas in various locations in western Canada, and it operates a refining and marketing business in Ontario with retail distribution under the Sunoco brand. The company notes that Sunoco in Canada is unrelated to Sunoco in the US, which is owned by Sunoco Inc., Philadelphia. Suncor's US downstream assets include pipeline and refining operations in Colorado and Wyoming and retail sales in the Denver area under the Phillips 66 brand.