Two big Canadian heavy oil companies said on Thursday they are delaying new projects and cutting capital spending as the global credit crunch and plunging crude prices play havoc with Alberta's high-cost oilsands.

Suncor Energy Inc. said it is slashing next year's capital budget by one-third to $6 billion and delaying the completion of its Voyageur heavy oil upgrader by one year to 2012.

Also, Petro-Canada said the costs of its bitumen upgrader planned for Sturgeon County, northeast of Edmonton, have risen to approximately $28 billion from the initial estimates of $18 billion, too expensive for the liking of the Calgary-based oil giant or its partners, UTS Energy Corp. and Teck Cominco Ltd.

As a result, the group might dump the construction of a new upgrader entirely.

"The partners are looking at different configurations and timing options to arrive at the best project combination. In the near term, the partners contemplate making an investment decision only with respect to the mining portion of the project and deferring a decision to construct the upgrader portion, which would substantially reduce project costs prior to first oil," Petro-Canada said in a press release concerning its third quarter.

The partners remain committed to pulling bitumen out of the on-site mine starting in 2011, Petro-Canada said.

In its release, Suncor noted that the altered financial world — tightening credit conditions and falling oil prices — forced the oil company to make changes to its spending program, which the firm had increased only one month earlier by 20 per cent to approximately $8.5 billion.

Three-month chart for Suncor Energy Inc.

"Our aim is to ensure we are living within our means during a time of market uncertainty, while also making the strategic spending decisions that will allow us to continue on our growth path," said Rick George, Suncor's president and chief executive officer.

Oil prices have fallen below $70 US a barrel and, despite an emergency meeting of OPEC, analysts now expect crude costs to stay at less than one-half the June peak of $147.

In past public comments, George cited $75 to $80 a barrel as the break-even price for oilsands projects.

The $20.6-billion Voyageur project, also to be situated north of Fort McMurray, was originally set to pump 550,000 barrels daily by 2012.

"We remain committed to an integrated expansion strategy and targeted oilsands production of 550,000 barrels per day. However, we've always had options available to us in terms of how the expansion is rolled out — and we believe in the current economic environment it's prudent to exercise that flexibility,” George said.