Suncor Energy Inc. Chief Executive Officer Steve Williams said the profit margin for processing bitumen from Canada’s oil sands is “disappearing” as the company reviews a joint project with partner Total SA.
Upgrading, a way to process bitumen into synthetic crude and diesel fuel, isn’t as attractive as it was a couple of years ago after production volumes of U.S. light sweet crude exceeded expectations, Williams, who heads Canada’s largest energy company by market value, said Thursday at the Toronto Board of Trade.
Williams said Monday the Calgary-based company has accelerated its review of the Voyageur project with Paris-based Total and plans to make a decision by the end of March. Voyageur would be the third upgrader at Suncor’s oil-sands site in Fort McMurray, Alberta, and would be capable of processing 200,000 barrels a day.
“It’s a much tougher project to get to work economically now than a year ago,” Williams told reporters after the speech. “As we start to form a different view on the price of light synthetic crude or it’s read-across, which is the light sweet crude being produced in the U.S. at the moment, the margins are being squeezed.”
Suncor is looking at all options for Voyageur, “from going ahead with the project, to maybe different partners, through to a different process configuration,” Williams said.
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