Is Suncor Energy the Best Oil Company for Your Portfolio?

We have looked at enough of these companies at this point that we can step out of the box a little and try to understand what is going on at Suncor (SU), which is the big Canadian outfit that is working on that oil sands project.

To summarize the process, there is a deposit of oil sands in the Athabasca region of Canada. This material is mainly minerals, but on average is 11% hydrocarbon, which is comparable to the level found at a lot of the solid waste landfills in the nation.

There are two processes for extracting this stuff: strip mining, which involves removing several meters of overburden material, and extracting the sands using enormous cranes and trucks. The resultant material is then heated with water into a slurry, as much of the hydrocarbons are extracted as possible, and then the material is cracked into a crude-oil-like substance which can be used as the feedstock in a more or less normal refinery. (more)