Suncor resolved a long standing dispute and gained additional working interest in an oilsands project from Total
Suncor provided a business update for fourth quarter of 2017, highlighting upstream production of 736,000 barrels of boe/d, which is in line with record production from the third quarter of 2017, according to a press release.
Oil sands operations produced approximately 447,000 barrels per day (b/d) including 6,000 b/d from Fort Hills. Syncrude produced 325,000 b/d for the quarter, 174,000 b/d net to Suncor.
Production from other upstream assets remained solid with total production from Exploration & Production assets in Canada, the U.K. and Libya of 115,000 boe/d.
“Across the company we finished 2017 with strong quarterly performance. This is in addition to substantial progress through the year on our two major growth projects. At Hebron, we produced first oil ahead of schedule in late Nov. And at Fort Hills, we safely completed five test runs of the plant, producing 1.4 million barrels of froth,” said Steve Williams, Suncor president and chief executive officer.
With rising crude oil prices during the fourth quarter, Suncor’s upstream realized prices were strong and thanks to its integrated business model, the company was minimally affected by the significant widening of the light / heavy price differentials over the past few weeks.
Suncor benefited from efficient and reliable upgrader operations during the quarter, with utilization rates of 93 per cent at the Suncor base plant and 94 per cent at Syncrude.
Refining and marketing operations also demonstrated solid reliability with average refinery utilization of 94 per cent for a quarterly crude throughput of 433,000 b/d, according to Suncor.
Refined product demand remained high with distillate sales growing over the same quarter in 2016.
During 2017, the mine, primary extraction, utilities and froth assets were commissioned. More than 80 per cent of the Fort Hills plant is now operational and has safely run at full capacity through the test runs over the past four months.
All three secondary extraction trains are mechanically complete with the first train in its final commissioning stage and expected to start up in mid-January.
The second and third trains are currently being insulated and expected to start up in the first half of 2018, as planned. Fort Hills remains on track to reach 90 per cent capacity by the end of 2018.
Suncor also announced that the Fort Hills partners have resolved the previously announced commercial dispute and reached an agreement whereby Suncor and Teck Resources Limited (Teck) have each acquired an additional working interest in the Fort Hills project from Total E&P Canada (Total).
Under the terms of the agreement, Suncor’s share of the project increased to 53.06 per cent and Teck’s share increased to 20.89 per cent. Total’s share decreased to 26.05 per cent.
Suncor and Teck have funded an increased share of the project capital, in the amounts of approximately $300 million and $120 million respectively, equating to approximately $69,330 per flowing barrel, commensurate with the additional working interests, which may be further adjusted in accordance with the terms of the agreement.
“We’re pleased to have reached this agreement and taken a bigger stake in what is arguably the best long-term growth project in our industry. We also achieved a number of other significant milestones including the East Tank Farm Development partnership with Fort McKay and Mikisew Cree First Nations,” sand Williams.
Other highlights from the latter part of the year include a Progressive Aboriginal Relations (PAR) gold level certification and the purchase of a 41 per cent equity interest in PetroNor, a Quebec-based petroleum products distributor owned and operated by the James Bay Cree.
Suncor’s fourth quarter results will be issued Feb. 7, 2018.