Suncor Energy and partners proceeding with Fort Hills oil sands project

CALGARY, ALBERTA--(Marketwired - Oct. 30, 2013) - Suncor Energy today announced that, together with joint venture co-owners Total E&P Canada Ltd. and Teck Resources Limited., it has voted unanimously to proceed with the Fort Hills oil sands mining project. The Fort Hills project is located in Alberta's Athabasca region, 90 kilometres north of Fort McMurray.

"The Fort Hills project is one of the best undeveloped oil sands mining assets in the Athabasca region, is an excellent fit with Suncor's diversified production portfolio, and will generate significant economic value for Suncor, Alberta and Canada," said Steve Williams, president and chief executive officer. "Given its combination of ore quality and resource size, we expect this project will be a significant source of long-term cash flow for the company and contribute strong returns for our shareholders."

The Fort Hills Energy LP consists of three limited partners: Suncor (40.8 percent interest), Total E&P Canada (39.2 percent interest) and Teck Resources Limited (20.0 percent interest). Suncor is the developer and operator of the Fort Hills project via an operating services contract. The project will benefit from Suncor's experience and well established infrastructure in the region.

The project is scheduled to produce first oil as early as the fourth quarter of 2017 and achieve 90 per cent of its planned production capacity of 180,000 barrels per day within 12 months. With best estimate contingent resources of approximately 3.3 billion barrels of bitumen, the mine life is expected to be in excess of 50 years at the current planned production rate.

The Fort Hills project has been designed to utilize Suncor's latest technology and approach to tailings management and reclamation processes. Suncor will closely monitor operations to allow for existing and future water quality standards and environmental requirements to be met or exceeded throughout the life of the project. The project will aim to return all disturbed lands to as close to a natural state as possible.

The go-forward capital investment in Fort Hills is estimated at approximately $13.5 billion ($5.5 billion net to Suncor) and is expected to account for approximately 15 per cent of Suncor's total capital budget on average per year. The total project cost is estimated at a capital intensity of approximately $84,000 per flowing barrel of bitumen and is within the range of similar recently completed oil sands mining projects.