After being shelved for years, Suncor Energy Inc announced in October that they will push through with plans to develop the Fort Hills oil sands mine. The project was placed on the backburner since the financial crisis in 2008 . The project will now move forward with ownership by Suncor Energy and its partners Total E&P Canada and Teck Resources Ltd at a cost of $13.5 billion.
Fort Hills was originally the joint venture formed by the alliance of three companies, namely UTS Energy, Petro-Canada and Teck Resources. In 2009, Suncor bought Petro-Canada and in 2010, French oil firm Total acquired UTS Energy.
Suncor said they expect Fort Hills to begin producing oil after four years at the earliest. When production starts, Suncor said it intends to produce 180,000 barrels a day within a year’s time. This is the mine’s full capacity. The production is set to comprise an estimated 15% of the oil firm’s average capital budget on an annual basis.
Located 90 kilometers north of Fort McMurray in Alberta, Fort Hills is estimated to contain 3.3 billion barrels of bitumen which can last for the next five decades. Suncor Chief Executive Officer Steve Williams said the project is set to give substantial economic benefits not only for the company but for the province of Alberta and Canada as a whole. The quality and size of the resource found in Fort Hills will ensure that the project will provide Suncor with long-term cash flow. At the same time the company’s shareholders will receive robust returns from their investment.
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