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Suncor's (SU +0.3%) decision last week to scrap its $11.5B Voyageur oil sands plant shows...

Suncor's (SU +0.3%) decision last week to scrap its $11.5B Voyageur oil sands plant shows Canadian producers are betting they can boost shareholder returns by shipping crude directly to refineries instead of investing in costly processing. "There’s going to continue to be a ramp-up in light oil and therefore that hurts the economics of an upgrader,” a Canaccord analyst says.
Comments (3)
  • The silver lining in the cloud, according to Merrill Lynch, is that SU's free cash flow will balloon, allowing for (hopefully) dividend increases.

     

    Long SU (fingers crossed!)
    1 Apr 2013, 12:18 PM Reply Like
  • The Canaccord analyst is correct and that is why it makes perfect sense to ship oilsands crude to the refineries on the US gulf coast. Thus, Suncor's share price will lag until there is increased pipeline & rail capacity to move product.
    1 Apr 2013, 02:15 PM Reply Like
  • Bad decision, shortsighted. They will be stuck with tar that nobody wants.
    1 Apr 2013, 02:17 PM Reply Like
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