Reuters News Service is reporting that Suncor Energy Inc. (TSX: T.SU, Stock Forum) is expected to shelve plans for a multi-billion dollar oil sands processing plant in northern Alberta when it announces the fate of the facility in the coming days. Weakening returns is apparently to blame.
In another development, Reuters says Imperial Oil Ltd. (TSX: T.IMO, Stock Forum) is set to launch its Kearl mining project after four years of construction.
Reuters says both events are evidence if changing dynamics in the Canadian oil sands industry, which is having to deal with more challenging economics due to surging production of cheaper light oil in the United States, and a move away from “upgrading” oil sands bitumen into lighter, refinery-ready oil in Alberta.
Imperial Oil shares eased 0.52% Tuesday to $41.99, leaving the company with a market cap of $35.6 billion, based on 847.6 million shares outstanding. The 52-week range is $48.32 and $39.77.
Suncor was almost unchanged Tuesday, rising 0.07% to $30.75, and leaving the company with a market cap of $46.7 billion, based on 1.5 billion shares outstanding. The 52-week range is $34.99 and $26.97.