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Released May 26, 2023 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--The latest annual oil sands production outlook from S&P Global Commodity Insights forecasts Canadian oil sands production could reach 3.7 million barrels per day (BBL/d) by 2030, which is half a million barrels higher than the present capacity. That increase could be buoyed by Suncor Energy Incorporated's (NYSE:SU) (Calgary, Alberta) oil sands operations.
The latest forecast from S&P's 2023 Annual Oil Sands Outlook - in an era of optimization report represents the annual report's first upward revision (140,000 BBL/d from the previous outlook) of Canada's oil sands growth in more than half a decade.
"Higher oil prices have driven record returns for the Canadian oil sands," said Celina Hwang, the director of North American Crude Oil Markets for S&P Global Commodity Insights, in a press release. "Although producers continue to demonstrate capital discipline, stronger balance sheets are now giving oil sands companies renewed confidence in regards to their intentions for capital spending."
The report notes the main reason for this year's upward revision in potential oil sands production is the discovery of additional opportunities to improve efficiency and/or optimize output, and added the most significant factor is "step-out optimization projects"--moving from "existing operational areas into new high-quality adjacent lands."
The S&P Global Commodity Insights report forecasts record annual crude oil production and export levels for the rest of the decade, albeit with a drop in growth expected around the mid- to-late 2020s and a "shallow decline" expected to emerge in the early 2030s, the latter of which is due to the "long, flat production profile of Canadian oil sands assets."
The report notes that policy--in particular a proposed federal oil and gas cap that intends to establish an oil sands emissions target--remains the most likely source of downside risk. Emissions targets that are too stringent could inhibit further investment, it added.
Syncrude Canada Limited, Suncor Energy's joint venture with Imperial Oil Limited (Calgary), China Petroleum & Chemical Corporation (Sinopec) (Beijing) and China National Offshore Oil Corporation (CNOOC), is the largest single producer of synthetic crude oil in Canada.
Among the Canadian oil sands projects being tracked by Industrial Info is Syncrude's expansion of the existing, 7,500-ton-per-hour Mildred Lake North oil sands mine complex, north of Fort McMurray, Alberta--which is home to Suncor's synthetic crude oil production (capacity of 350,000 BBL/d)--to sustain bitumen levels and extend the mine's life by 14 years. Reserves are estimated to be depleted in or about 2023.
The US$1.5 billion Mildred Lake West Extension project, began in early 2021 and is expected to be brought online in mid-to-late 2025. If economic conditions are favorable, Suncor hopes to move forward with the proposed US$1.4 billion Mildred Lake East area to further sustain bitumen levels. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can read detailed reports on Mildred Lake West and Mildred Lake East.
Suncor expects 2023 capital expenditures to total between C$5.4 million and C$5.8 million (US$4.02 million and US$4.32 million), about 45% of which will go toward upstream projects. Suncor expects to focus its 2023 capital spending on "high-return projects and investments that are expected to enhance value within the company's existing assets base and accelerate the company's progress toward its net-zero [greenhouse-gas] objective," according to a fourth-quarter 2022 earnings-related press release.
That's not all Suncor is doing to boost its oil sands assets--it has agreed to purchase the Canadian operations from TotalEnergies SE (NYSE:TTE) (Courbevoie, France) for C$5.5 billion (US$4.1 billion), with potential additional payments of up to C$600 million (US$450 million). The transaction includes the remaining 31.23% interest in the Fort Hills Oil Sands Mine project, and a 50% interest in the Surmont oil sands asset, both of which are in Fort McMurray. ConocoPhillips Company (NYSE:COP) (Houston, Texas) owns the other 50% of the Surmont operation.
The acquisition will add 135,000 BBL/d to Suncor's bitumen production capacity and 2.1 billion barrels of reserves, according to a related press release, and the additional bitumen production "will effectively replace half of the current Base Mine bitumen production." Subscribers to the GMI Plant Database can read more about the Fort Hills and Surmont assets.
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).
The latest forecast from S&P's 2023 Annual Oil Sands Outlook - in an era of optimization report represents the annual report's first upward revision (140,000 BBL/d from the previous outlook) of Canada's oil sands growth in more than half a decade.
"Higher oil prices have driven record returns for the Canadian oil sands," said Celina Hwang, the director of North American Crude Oil Markets for S&P Global Commodity Insights, in a press release. "Although producers continue to demonstrate capital discipline, stronger balance sheets are now giving oil sands companies renewed confidence in regards to their intentions for capital spending."
The report notes the main reason for this year's upward revision in potential oil sands production is the discovery of additional opportunities to improve efficiency and/or optimize output, and added the most significant factor is "step-out optimization projects"--moving from "existing operational areas into new high-quality adjacent lands."
The S&P Global Commodity Insights report forecasts record annual crude oil production and export levels for the rest of the decade, albeit with a drop in growth expected around the mid- to-late 2020s and a "shallow decline" expected to emerge in the early 2030s, the latter of which is due to the "long, flat production profile of Canadian oil sands assets."
The report notes that policy--in particular a proposed federal oil and gas cap that intends to establish an oil sands emissions target--remains the most likely source of downside risk. Emissions targets that are too stringent could inhibit further investment, it added.
Syncrude Canada Limited, Suncor Energy's joint venture with Imperial Oil Limited (Calgary), China Petroleum & Chemical Corporation (Sinopec) (Beijing) and China National Offshore Oil Corporation (CNOOC), is the largest single producer of synthetic crude oil in Canada.
Among the Canadian oil sands projects being tracked by Industrial Info is Syncrude's expansion of the existing, 7,500-ton-per-hour Mildred Lake North oil sands mine complex, north of Fort McMurray, Alberta--which is home to Suncor's synthetic crude oil production (capacity of 350,000 BBL/d)--to sustain bitumen levels and extend the mine's life by 14 years. Reserves are estimated to be depleted in or about 2023.
The US$1.5 billion Mildred Lake West Extension project, began in early 2021 and is expected to be brought online in mid-to-late 2025. If economic conditions are favorable, Suncor hopes to move forward with the proposed US$1.4 billion Mildred Lake East area to further sustain bitumen levels. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can read detailed reports on Mildred Lake West and Mildred Lake East.
Suncor expects 2023 capital expenditures to total between C$5.4 million and C$5.8 million (US$4.02 million and US$4.32 million), about 45% of which will go toward upstream projects. Suncor expects to focus its 2023 capital spending on "high-return projects and investments that are expected to enhance value within the company's existing assets base and accelerate the company's progress toward its net-zero [greenhouse-gas] objective," according to a fourth-quarter 2022 earnings-related press release.
That's not all Suncor is doing to boost its oil sands assets--it has agreed to purchase the Canadian operations from TotalEnergies SE (NYSE:TTE) (Courbevoie, France) for C$5.5 billion (US$4.1 billion), with potential additional payments of up to C$600 million (US$450 million). The transaction includes the remaining 31.23% interest in the Fort Hills Oil Sands Mine project, and a 50% interest in the Surmont oil sands asset, both of which are in Fort McMurray. ConocoPhillips Company (NYSE:COP) (Houston, Texas) owns the other 50% of the Surmont operation.
The acquisition will add 135,000 BBL/d to Suncor's bitumen production capacity and 2.1 billion barrels of reserves, according to a related press release, and the additional bitumen production "will effectively replace half of the current Base Mine bitumen production." Subscribers to the GMI Plant Database can read more about the Fort Hills and Surmont assets.
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).
