Planned and unplanned shutdowns dent Suncor's first quarter production
Suncor Energy posted a 21% y/y increase in adjusted profits in the first quarter, rising to $985 million on higher oil prices and improved refining margins.
Earnings declined 42% to $789 million as lower production and a $329 million forex loss offset a non-cash gain of $133 million on the sale of its landholdings in northeastern BC.
Some other key highlights from this week's earnings release:
- Total upstream production averaged 689,400 boe/day in Q1, down 5% y/y.
- Output from the oil sands fell 10% to 404,800 bbl/day. The declines were blamed on a two month shutdown of the Syncrude facility as well as a weather-related outage of its Base Plant operations. Upgrader utilization declined to 80% at Suncor's Base Plant and 71% at Syncrude.
- Operating costs at Suncor's oil sands facilities (excluding Syncrude and Fort Hills) were reported at $26.85 per barrel, up from $22.55 for the same time last year. The increase was blamed on lower production volumes, higher unplanned maintenance costs and prep work for the planned maintenance turnaround on Upgrader 1, which began in the second quarter.
- Operating costs at Syncrude were reported at $50.75 per barrel of synthetic crude, up from $45.15 for the same time last year. The increase was attributed to both planned and unplanned maintenance shutdowns at the upgrader.
- The company's 2018 capital program will be focused on the continued ramp up of both the Fort Hills oil sands mine and Hebron production platform off the coast of Newfoundland. The company expects to spend $4.5 to $5.0 billion this year, including a major turnaround of Upgrader 1 and a recently approved tailings management plan.
CEO Steve Williams says the company has sufficient pipeline space booked for all its volumes, but he remains confident both the Trans Mountain Expansion and Line 3 Replacement will eventually get built. Williams also noted that Syncrude should return to normal production levels "within weeks."