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Researched by Industrial Info Resources (Sugar Land, Texas)--Suncor Energy Incorporated (NYSE:SU) (Calgary, Alberta) continues to tighten its belt as the global Oil & Gas Industry expects little relief in the near future. Suncor slashed its full-year capital expenditures to C$3.8 billion (US$2.96 billion) in 2020, a 33% drop from 2019, and has no plans to hike capital spending this year, despite a steady increase in oil prices. Industrial Info is tracking more than US$20 billion in active projects from Suncor, more than 95% of which is attributed to projects in Alberta.
Click on the image at right for a graph detailing Suncor's active projects, by project type.
Suncor's C$168 million (US$130.9 million) net loss in fourth-quarter 2020 was small potatoes when compared with the C$2.34 billion (US$1.82 billion) net loss in the same period of 2019, but the earlier period included a C$3.35 billion (US$2.61 billion) write-down for Suncor's Fort Hills oilsands mine and the West White Rose oil project, offshore Newfoundland and Labrador. Last month, Suncor executives warned that the company likely will take a further C$425 million (US$331 million) write-down on White Rose sometime this year.
From an operational standpoint, Suncor saw a fourth-quarter operating loss of C$142 million (US$110.6 million), compared with operating earnings of C$782 million (US$609.2 million) in fourth-quarter 2020. Some of the one-time losses in fourth-quarter 2020 were mitigated by one-time gains: The company incurred a C$423 million (US$329.5 million) after-tax asset impairment charge, as well as a C$142 million (US$110.6 million) transportation provision stemming from the Biden administration's decision to halt the Keystone XL oil pipeline, but Suncor benefited from a C$539 million (US$419.9 million) unrealized after-tax foreign exchange gain on U.S. dollar denominated debt.
The operating loss reflects Suncor's 31% year-over-year quarterly drop in revenues to C$6.6 billion (US$5.14 billion). The company is planning to eliminate as many as 1,930 jobs through the spring of 2022 as it wrestles with price and demand levels that likely will remain relatively low, even after the COVID-19 pandemic abates. Despite these cutbacks, Suncor recently restarted activity at one of its highest-valued projects: the estimated US$1.06 billion addition of a natural gas-fired, combined-cycle (NGCC) cogeneration unit at its Oil Sands Base in Fort McMurray, Alberta, which was paused last March following the COVID-19 outbreak.
The unit is expected to generate 800 megawatts (MW) from a pair of gas turbines, in an effort to reduce costs and carbon emissions. It will replace a trio of outdated coal-fired boilers at the site, which has been mining bitumen since 2001 and currently produces 350,000 barrels per day (BBL/d). For more information, see Industrial Info's project report.
One of Suncor's least characteristic projects also is being revived: the estimated US$450 million Forty Mile Windfarm in Bow Island, Alberta, near Medicine Hat, which is expected to generate up to 400 MW from 89 turbines. For more information, see Industrial Info's project report.
"We've restarted construction of the cogen facility at the Base plant and the Forty Mile Wind project, which is already accounted for within our current capital guidance," said Mark Little, the chief executive officer of Suncor, in a quarterly earnings-related conference call. "That said, despite the commodity price outlook being well above our planning basis for 2021, I can assure you that we will not increase our 2021 capital guidance above the current range."
Suncor also saw major movement at Syncrude Canada Limited, a joint venture with Imperial Oil Limited (TSX:IMO) (Calgary, Alberta), China Petroleum & Chemical Corporation (Sinopec) and China National Offshore Oil Corporation (CNOOC). Suncor, the majority stakeholder, will take over as operator of Syncrude's Mildred Lake Oil Sands Mine in Fort McMurray, by the end of 2021. The company attributed a 12.7% increase in synthetic crude oil during the fourth quarter (amid a year-over-year decline in overall production) to strong reliability at the Syncrude and Oil Sands Base facilities.
It remains unclear how the pandemic will affect the long-term status of Syncrude's proposed extension of the Mildred Lake North facility, which also was paused amid the pandemic. The extension is designed to extend the mine life by 14 years via the development of two open-pit mining areas. (Mildred Lake North's reserves are estimated to be depleted on or about 2023). For more information, see Industrial Info's project report.
Despite the slowdown in demand, Suncor boosted the capacity at its Edmonton Refinery in Sherwood Park, Alberta, from 142,000 to 146,000 BBL/d through debottlenecking activities. The company also is preparing for a US$20 million boiler replacement at the Edmonton Refinery to provide additional steam for internal use, and is considering a proposed, estimated US$12 million upgrade of the facility's crude and vacuum units. For more information, see Industrial Info's project reports on the boiler replacement and crude/vacuum upgrades.
Suncor also expanded capacity at its Firebag Bitumen Processing Plant in Fort McMurray by 12,000 BBL/d to 215,000 BBL/d during the fourth quarter, and the company is considering a proposed, estimated $120 million debottlenecking project that would add another 20,000 BBL/d. For more information, see Industrial Info's project report.
Suncor produced 769,200 barrels of oil equivalent per day (BOE/d) in fourth-quarter 2020, down slightly from 778,200 BOE/d in fourth-quarter 2019; refinery oil throughput totaled 438,000 BOE/d, down from 447,500 BOE/d in the same period in 2019.
In addition to the abovementioned capital-spending projects, Industrial Info is tracking 35 maintenance-related projects from Suncor, worth about US$436 million, that are set to kick off through 2023. Click here for a list.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Click on the image at right for a graph detailing Suncor's active projects, by project type.Suncor's C$168 million (US$130.9 million) net loss in fourth-quarter 2020 was small potatoes when compared with the C$2.34 billion (US$1.82 billion) net loss in the same period of 2019, but the earlier period included a C$3.35 billion (US$2.61 billion) write-down for Suncor's Fort Hills oilsands mine and the West White Rose oil project, offshore Newfoundland and Labrador. Last month, Suncor executives warned that the company likely will take a further C$425 million (US$331 million) write-down on White Rose sometime this year.
From an operational standpoint, Suncor saw a fourth-quarter operating loss of C$142 million (US$110.6 million), compared with operating earnings of C$782 million (US$609.2 million) in fourth-quarter 2020. Some of the one-time losses in fourth-quarter 2020 were mitigated by one-time gains: The company incurred a C$423 million (US$329.5 million) after-tax asset impairment charge, as well as a C$142 million (US$110.6 million) transportation provision stemming from the Biden administration's decision to halt the Keystone XL oil pipeline, but Suncor benefited from a C$539 million (US$419.9 million) unrealized after-tax foreign exchange gain on U.S. dollar denominated debt.
The operating loss reflects Suncor's 31% year-over-year quarterly drop in revenues to C$6.6 billion (US$5.14 billion). The company is planning to eliminate as many as 1,930 jobs through the spring of 2022 as it wrestles with price and demand levels that likely will remain relatively low, even after the COVID-19 pandemic abates. Despite these cutbacks, Suncor recently restarted activity at one of its highest-valued projects: the estimated US$1.06 billion addition of a natural gas-fired, combined-cycle (NGCC) cogeneration unit at its Oil Sands Base in Fort McMurray, Alberta, which was paused last March following the COVID-19 outbreak.
The unit is expected to generate 800 megawatts (MW) from a pair of gas turbines, in an effort to reduce costs and carbon emissions. It will replace a trio of outdated coal-fired boilers at the site, which has been mining bitumen since 2001 and currently produces 350,000 barrels per day (BBL/d). For more information, see Industrial Info's project report.
One of Suncor's least characteristic projects also is being revived: the estimated US$450 million Forty Mile Windfarm in Bow Island, Alberta, near Medicine Hat, which is expected to generate up to 400 MW from 89 turbines. For more information, see Industrial Info's project report.
"We've restarted construction of the cogen facility at the Base plant and the Forty Mile Wind project, which is already accounted for within our current capital guidance," said Mark Little, the chief executive officer of Suncor, in a quarterly earnings-related conference call. "That said, despite the commodity price outlook being well above our planning basis for 2021, I can assure you that we will not increase our 2021 capital guidance above the current range."
Suncor also saw major movement at Syncrude Canada Limited, a joint venture with Imperial Oil Limited (TSX:IMO) (Calgary, Alberta), China Petroleum & Chemical Corporation (Sinopec) and China National Offshore Oil Corporation (CNOOC). Suncor, the majority stakeholder, will take over as operator of Syncrude's Mildred Lake Oil Sands Mine in Fort McMurray, by the end of 2021. The company attributed a 12.7% increase in synthetic crude oil during the fourth quarter (amid a year-over-year decline in overall production) to strong reliability at the Syncrude and Oil Sands Base facilities.
It remains unclear how the pandemic will affect the long-term status of Syncrude's proposed extension of the Mildred Lake North facility, which also was paused amid the pandemic. The extension is designed to extend the mine life by 14 years via the development of two open-pit mining areas. (Mildred Lake North's reserves are estimated to be depleted on or about 2023). For more information, see Industrial Info's project report.
Despite the slowdown in demand, Suncor boosted the capacity at its Edmonton Refinery in Sherwood Park, Alberta, from 142,000 to 146,000 BBL/d through debottlenecking activities. The company also is preparing for a US$20 million boiler replacement at the Edmonton Refinery to provide additional steam for internal use, and is considering a proposed, estimated US$12 million upgrade of the facility's crude and vacuum units. For more information, see Industrial Info's project reports on the boiler replacement and crude/vacuum upgrades.
Suncor also expanded capacity at its Firebag Bitumen Processing Plant in Fort McMurray by 12,000 BBL/d to 215,000 BBL/d during the fourth quarter, and the company is considering a proposed, estimated $120 million debottlenecking project that would add another 20,000 BBL/d. For more information, see Industrial Info's project report.
Suncor produced 769,200 barrels of oil equivalent per day (BOE/d) in fourth-quarter 2020, down slightly from 778,200 BOE/d in fourth-quarter 2019; refinery oil throughput totaled 438,000 BOE/d, down from 447,500 BOE/d in the same period in 2019.
In addition to the abovementioned capital-spending projects, Industrial Info is tracking 35 maintenance-related projects from Suncor, worth about US$436 million, that are set to kick off through 2023. Click here for a list.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
