Suncor Energy Slashes FY15 CapEx Budget By $1 Bln; To Cut 1,000 Jobs

(RTTNews) - Suncor Energy Inc. (SU.TO, SU) on Tuesday announced significant spending reductions to its 2015 budget in response to the current lower crude price environment.

The cuts include a $1 billion decrease in the company's capital spending program, as well as sustainable operating expense reductions of $600 million to $800 million to be phased in over two years offsetting inflation and growth.

Suncor is implementing a number of initiatives to achieve the cost reduction targets, including deferral of some capital projects that have not yet been sanctioned, such as MacKay River 2 and the White Rose Extension, as well as reductions to discretionary spending.

Suncor also said it will reduce total workforce numbers in 2015 by about 1000 people, mainly through its contract workforce, in addition to reducing employee positions. There will also be an overall hiring freeze for roles that are not critical to operations and safety, the company said.

Major projects in construction such as Fort Hills and Hebron will move forward as planned and take full advantage of the current economic environment.

Suncor has issued an update to its 2015 guidance to reflect, among other items, reduced spending and lower pricing and related assumptions. Production guidance for 2015 has not changed.