Suncor to expand oilsands project

Calgary-based Suncor Energy said Friday it is budgeting $5.5 billion for capital spending in 2010.

The priority will be the third and fourthphases ofits Firebag oilsands expansion project north of Fort McMurray, Alta.

"This officially restarts the growth of oilsands," CEO Rick George told analysts on a conference call.

Suncor became Canada's biggest oil companywith itstakeover of Petro-Canada earlier this year.

About $1.5 billion will go towards growth projects, including Firebag Stage 3. The project is named after a river in northern Alberta.

Suncor had half finished the project when the company shelved itas the recession took hold. It expects production to begin in the spring of 2011, with eventual production of 68,000 barrels per day of bitumen.

The proposed Voyageur upgrader, which would convert the dense bitumen from the oilsands into higher quality synthetic crude oil, will remain on hold for the foreseeable future. The project is seen as a way to keep more of the value of the oilsands in Canada rather than having the bitumen upgraded in American facilities.

"But I do see that Voyageur upgrader as a great option for us down the road at some point," said George.