CALGARY, Alberta, Jan. 14 (UPI) -- Canadian oil company Suncor Energy said it was cutting more than $800 million in capital spending in response to the low price for crude oil.
The company became the latest in a growing last of Canadian energy companies facing financial problems in a weakening market environment. Suncor said it was making "significant spending reductions" in its 2015 budget, which includes an $830 million cut in capital spending and operating expense reduction of around $580 million over two years.
"Cost management has been an ongoing focus, with successful efforts to reduce both capital and operating costs well underway before the decline in oil prices," Suncor President and Chief Executive Officer Steve Williams said in a Tuesday statement. "However, in today's low crude price environment, it's essential we accelerate this work."
The company said it has enacted a hiring freeze and expects to lay off about 1,000 people. Most major projects, however, will continue as planned and Suncor said it was not revising its production expectations for 2015.
Suncor in early 2014 said production levels were breaking records. In November, the company said it expected capital spending of around $6.3 billion and production of around 560,000 barrels of oil equivalent per day.
When oil prices were around $77 per barrel in mid-November, Williams said the company's disciplined approach to managing its capital program would an execution of the corporate strategy "even during periods of lower crude prices."
Canada's oil sector needs a break-even price for oil at around $65 per barrel. The price for Brent crude oil early Wednesday was around $46 per barrel.
"We will continue to carefully manage our spending priorities," Williams said.
Suncor rivals in December started announcing plans to cut spending in 2015. This week, Canadian Natural Resources, said it was cutting its capital expenditures from around $7.2 billion to $5.2 billion.
