Suncor to assume operation of Syncrude by end of next year

Suncor Energy says it will become the operator of Syncrude by the end of next year.

The Calgary-based energy company currently owns a 59 per cent stake in the Syncrude joint venture, alongside Imperial Oil at 25 per cent, Sinopec Oil Sands Partnership at nine per cent, and CNOOC at seven per cent.

Suncor said all joint owners have agreed in principle but that formal approval will still be required.

Mark Little, Suncor's president and chief executive officer, said the move presents a big opportunity for the company and other joint owners.

Little said "synergies" of $300 million each year are expected, and the company aims to achieve a cash operating cost of $30 Cdn. per barrel of oil and 90 per cent utilization.

He said job losses are expected on the administrative side of the business and more details will be clarified going forward.

"What's happening now is, instead of having a duplicate structure, now Suncor will take over that and the two organisations essentially will become one. And now we can bring the talents and capability on both sides of the fence to try to make this business as strong as possible," he told CBC.

Little said many families have members who work at both operations and that the companies will be stronger together.

"As neighbours for almost 50 years, Syncrude and Suncor have enjoyed a close relationship and a long, proud history in the region," Little said in a Monday news release.

Syncrude is the largest single source crude oil producer in Canada, and is located in the Athabasca oilsands near Fort McMurray in northern Alberta, where Suncor also has operations.

Mike MacSween, executive vice president for Suncor's upstream, said Suncor and Syncrude are working together to ensure the transition is done safely and thoughtfully.

"The oilsands are a large, complex business, we need talented people to run the facilities and Syncrude has a very experienced, skilled workforce that are committed to the region," he said.

Syncrude said on Twitter that it will continue to keep employees and partners informed as it works through the transition process.

"We're proud of our employee's expertise and commitment to responsible oilsands development. Their contributions will continue to play a strong part in this new chapter," the company's post read.