Suncor Sees No Major Impact From Kyoto

CALGARY -- - Suncor Energy Inc. said that the costs of the controversial Kyoto Protocol will not affect its growth plans as the company announced plans to spend more money in 2003.

The Calgary company plans to spend $1.05 billion this year, most of its on its oil sands project. That is up from $900 million the company spent on capital expenditures last year.

"Our capital spending plan illustrates that Suncor remains keenly focused on well-managed and predictable oil sands growth," Rick George, the company's president and chief executive officer, said.

"Capital investment in 2003 supports our plan of increasing oil production to half a million barrels per day over the next 10 years and achieving our goal of becoming one of the lowest cost oil producers in North America," George said.

Suncor said it currently estimates that in 2010, the exposure of the Kyoto Protocol on the company's oil sands cash operating costs would be about 20 to 27 cents per barrel. That is based on a production level of 500,000 barrels per day and that the maximum price for carbon credits will be capped at $15 per tonne.

The company also said it is aiming to cut its debt to $2.4 billion by the end of 2003, George said. Suncor also expects its operating costs for the fourth quarter will be higher than previously forecast. Suncor said that cash operating costs will be $12.50 to $13 per barrel, about 50 cents per barrel higher than the company forecast in late October.