Warren Buffett Invests Half Billion Dollars In Oil Sands Producer Suncor

Warren Buffet

Warren Buffett's Berkshire Hathaway announced through a regulatory filing with the Securities and Exchange Commission that it bought $524 million worth of Suncor stock last quarter.  Suncor is a Canadian oil company that derives most of its current oil production -- and future expansion plans -- from Alberta's oil sands.

Buffett bought Suncor to help ensure a steady supply of oil for his Burlington Northern Sante Fe (BNSF) railroad to move. Oil currently accounts for about 4% of BNSF's freight.  That's expected to double over the next several years.

Suncor owns huge tracts of oil sands resources from which oil production is projected to continue to grow.

Suncor doesn't have the same transportation issues as some other oil sands producers. It has locked up more than enough pipeline and rail capacity to move its current and planed production for several years. Plus, it owns several refineries, which help the firm avoid having to sell its crude for the depressed, mid-continent prices. (CNN Money, 8/15/2013)