Suncor Deepens Spending Cuts for 2015 as Oil Price Languishes

Suncor Energy Inc., Canada’s largest oil producer, cut its spending plan for 2015 for a second time and eliminated some non-essential projects as part of cost-reduction efforts.

The company now plans to spend between C$5.8 billion ($4.5 billion) and C$6.4 billion from an earlier range of C$6.2 billion and C$6.8 billion, Calgary-based Suncor said Wednesday Canadian time in a statement on Marketwired.

Suncor has already cut about 1,000 jobs and previously lowered its 2015 capital budget by C$1 billion while delaying projects to weather collapsing prices. Still, it’s pressing ahead with the C$13 billion Fort Hills oil-sands mine.

The move to cut spending comes after the price of West Texas Intermediate moved back into a bear market, dropping below $50 a barrel earlier this month for the first time in about a quarter. The U.S. benchmark, averaged about $58 in the second quarter compared with about $103 in the year-earlier period.

WTI for September delivery was at $48.90 a barrel in electronic trading on the New York Mercantile Exchange, up 11 cents, at 11:32 a.m. Thursday in Sydney.

Even with the spending reductions, Suncor’s oil sands production in the quarter rose to 423,800 barrel a day from 378,800 barrels in the year-earlier period. The improvement was helped by better operational reliability, the company said.

Second-quarter net income more than tripled in the quarter to C$729 million as it booked gains from reassessed debt and asset disposals.

The shares rose 4.3 percent to C$34.62 at the close in Toronto on Wednesday, trimming their decline for the year to 6.2 percent.