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Millions in savings coming soon for Suncor

Suncor says it can save up to $800 million sooner than it expected. The company gave an update on the cost management program it first announced in January. At the time, it also announced 1,000 jobs would be cut. The savings of $600 to $800 million would come from its operating budget this year, instead of in the two-year period it planned for.

“Prudent cost management was a central focus for us well before the downturn in crude prices,” stated 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 is also on track to shave $1 billion from its capital budget. It says progress is continuing on projects that include Fort Hills and Hebron. The cost management program delayed the West White Rose Extension which was scheduled to bring in about 8,000 bbl/d net to Suncor in 2018. It also said a sanction decision on MacKay River 2 would be deferred until market economic conditions improve.

“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.

By the end of March, Suncor was averaging about 598,000 boe/d, without counting production from its Libya sites. In the 4th quarter of 2014, Suncor saw a heavy drop in net earnings from year-to-year, posting earnings of $84 million compared to $443 million in 2013.