Released August 17, 2023 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Oil sands production for Canada showed resilience even during a low-price cycle during the first half of the year and the pursuit of a low-emissions economy, quarterly earnings show.
Canadian energy company Suncor Energy Incorporated (NYSE:SU) (Calgary, Alberta) joined the list of those seeing the weak commodity cycle from the first half of the year bruise revenues, though production came in on par with trends and with lower emission intensity.
Suncor, the first company to commercially develop the oil sands in northern Alberta, said it delivered total upstream production of 741,900 barrels of oil equivalent per day (BOE/d), more or less unchanged from the first three months of the year, but some 20,000 BOE/d more than the same period in 2023.
Both bitumen and conventional oil production improved for the company. Suncor is also working to acquire another 31.2% interest in the Fort Hills reserve, where it plans to use special treatment processes to "decarbonize" the end product.
"The resulting emissions intensity is similar to the typical barrel refined in North America, on a full life-cycle basis," the company stated.
Canada, in large part due to the production from the Athabasca play in Alberta, boasts the third-largest crude oil reserves in the world, though the viscosity of that oil and the corresponding production challenges also make it among the most carbon-intensive.
For methane, a potent greenhouse gas that has far more warming potential than carbon dioxide, operators are working to capture that resource rather than vent it off. Other efforts are focused on carbon capture and storage operations, where Industrial Info sees an estimated $180 billion in potentially active projects across North America.
Canada is working to balance a history rich in oil and gas with renewable energy, with the federal government unveiling a renewable energy tax credit in its budget earlier this year. Programs can receive a tax credit as high as 30% on capital investments through 2034, after which the incentive drops to 15% before eventual expiration.
Alberta, the nation's richest oil and gas province, is already doing the work needed to achieve a balanced energy sector. The provincial government published an outlook on its energy sector, saying it's proved to be an "incredibly resilient" producer that's set up for continued growth in 2023.
Major energy companies may be scaling back, however, on some of the general ambitions as revenue streams see depletion from the lower price climate during the first half of the year.
Suncor posted net earnings for the second quarter of US$1.4 billion, some 8.4% lower than the first quarter and 53% lower year-on-year. Western Canadian Select, a regional benchmark for the price of oil, averaged $101 per barrel in June 2022, compared to prices near $65 per barrel today.
Few analysts are expecting crude oil prices to reach the triple digit mark anytime soon as sluggish growth in China offsets positive developments in Western economies. With shareholders eager for more returns, meanwhile, major energy companies may see challenges in both their conventional and energy transition strategies.
Suncor in an annual climate report noted the global economy is increasingly reliant on a "diverse" energy mix, though fossil fuels will remain necessary for the foreseeable future.
Nearly all of the oil is in carbon-intensive oil sands, which account for 10% of Canada's total greenhouse gas emissions. Suncor estimates that oil sands production increased from 200,000 barrels per day (BBL/d) in the mid-1980s to about 3 million BBL/d today. Emissions, meanwhile, are down 30% from their peak.
More work, however, is necessary.
"Our biggest challenge today, as a company and industry, is to deploy technology once again -- combined with public-private co-investment -- to accelerate the decoupling of production and [greenhouse gas] intensity toward net-zero emissions by 2050," the company said.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Canadian energy company Suncor Energy Incorporated (NYSE:SU) (Calgary, Alberta) joined the list of those seeing the weak commodity cycle from the first half of the year bruise revenues, though production came in on par with trends and with lower emission intensity.
Suncor, the first company to commercially develop the oil sands in northern Alberta, said it delivered total upstream production of 741,900 barrels of oil equivalent per day (BOE/d), more or less unchanged from the first three months of the year, but some 20,000 BOE/d more than the same period in 2023.
Both bitumen and conventional oil production improved for the company. Suncor is also working to acquire another 31.2% interest in the Fort Hills reserve, where it plans to use special treatment processes to "decarbonize" the end product.
"The resulting emissions intensity is similar to the typical barrel refined in North America, on a full life-cycle basis," the company stated.
Canada, in large part due to the production from the Athabasca play in Alberta, boasts the third-largest crude oil reserves in the world, though the viscosity of that oil and the corresponding production challenges also make it among the most carbon-intensive.
For methane, a potent greenhouse gas that has far more warming potential than carbon dioxide, operators are working to capture that resource rather than vent it off. Other efforts are focused on carbon capture and storage operations, where Industrial Info sees an estimated $180 billion in potentially active projects across North America.
Canada is working to balance a history rich in oil and gas with renewable energy, with the federal government unveiling a renewable energy tax credit in its budget earlier this year. Programs can receive a tax credit as high as 30% on capital investments through 2034, after which the incentive drops to 15% before eventual expiration.
Alberta, the nation's richest oil and gas province, is already doing the work needed to achieve a balanced energy sector. The provincial government published an outlook on its energy sector, saying it's proved to be an "incredibly resilient" producer that's set up for continued growth in 2023.
Major energy companies may be scaling back, however, on some of the general ambitions as revenue streams see depletion from the lower price climate during the first half of the year.
Suncor posted net earnings for the second quarter of US$1.4 billion, some 8.4% lower than the first quarter and 53% lower year-on-year. Western Canadian Select, a regional benchmark for the price of oil, averaged $101 per barrel in June 2022, compared to prices near $65 per barrel today.
Few analysts are expecting crude oil prices to reach the triple digit mark anytime soon as sluggish growth in China offsets positive developments in Western economies. With shareholders eager for more returns, meanwhile, major energy companies may see challenges in both their conventional and energy transition strategies.
Suncor in an annual climate report noted the global economy is increasingly reliant on a "diverse" energy mix, though fossil fuels will remain necessary for the foreseeable future.
Nearly all of the oil is in carbon-intensive oil sands, which account for 10% of Canada's total greenhouse gas emissions. Suncor estimates that oil sands production increased from 200,000 barrels per day (BBL/d) in the mid-1980s to about 3 million BBL/d today. Emissions, meanwhile, are down 30% from their peak.
More work, however, is necessary.
"Our biggest challenge today, as a company and industry, is to deploy technology once again -- combined with public-private co-investment -- to accelerate the decoupling of production and [greenhouse gas] intensity toward net-zero emissions by 2050," the company said.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
