Suncor breaks production records amid economic uncertainty, cold snap
Oil sands producer Suncor Energy Inc. has reported quarterly production and refining records, despite Alberta's February deep freeze and an uncertain global economic environment.
Production for the Calgary-based oil giant hit 853,000 barrels a day in the first quarter of 2025 – the company's highest-ever first quarter and the second-highest quarter in its history, chief executive officer Rich Kruger told analysts on an earnings call Wednesday.
Suncor's net earnings for the first three months of 2025 were $1.69-billion, or $1.36 per share, up from $1.61-billion or $1.25 per share in the same period last year. Gross revenues were $13.33-billion, up from $13.31-billion.
Refining throughput was 483,000 barrels a day, 'far and away the highest first quarter in our history,' Mr. Kruger said, with every refinery producing more than at the same time last year. Refined product sales hit 605,000 barrels a day.
'The bottom line: One year into our three-year plan, we've exceeded every single target. We've essentially achieved two years of our planned improvements in the first year,' Mr. Kruger said.
'In 1954 a gentleman named Roger Bannister, the world's first four-minute miler, said, 'Records are meant to be broken.' And that is exactly what Suncor teams continue to do.'
Like other oil sands producers, Suncor's production slowed in February when Alberta was hit with a brutal, record-breaking cold snap. Mr. Kruger said the key to avoiding a complete slowdown is learning from past winters and making sure equipment is resilient – whether it's the fuel in haul trucks or the winterization of refineries.
'The last time I checked, it's always cold in Canada in the first quarter,' he said.
'We face this uncertainty, this variability, every year. The last two years, we have been very focused on, 'How do we engineer or design out the risk of that variability?''
Amid strong production, Suncor continues to assess its 1,800 Petro-Canada gas stations. It is upgrading those in major markets with the highest margins and selling those on the other end of the spectrum, with the goal of transforming 20 per cent of its network by the end of 2026.
The company's retail portfolio was a point of contention for activist investor Elliott Investment Management LP, which in 2022 pushed for a shakeup of Suncor and launched a campaign to oust several directors and explore a sale of the Petro-Canada chain.
Then-CEO Mark Little resigned, and Mr. Kruger took the reins of the company in 2023. People close to Elliott in 2024 said the fund was pleased with the improvement in Suncor's fiscal fortunes under the new CEO and happy to let the retail strategy play out.
Asked how Suncor views its Petro-Canada assets these days, Mr. Kruger said Wednesday, 'The only thing I unconditionally love are my kids and my grandkids. Everybody else has to earn their seat at the table.'
That doesn't mean he's keen to sell off the gas stations.
'I never say never, but right now that is a very, very valuable part of the company's operations,' he said.
'We look at all of our assets for their ongoing contribution and their value to us,' and the sites are a boon, he said, allowing Suncor to integrate its operations all the way from production to sales.
Suncor's retail volumes were up 6 per cent in the first quarter, and its truck stop business was up 9 per cent.
But even with record throughput at refineries, the company's exports were down 25 per cent in the quarter. Mr. Kruger said keeping more products in the domestic market played a big role in driving margin improvement.
Menno Hulshof, with TD Cowan Equity Research, wrote in a note Wednesday that the first-quarter results continued Suncor's 'trend of outperformance,' despite the February cold snap. He added that the company's 2025 production guidance is likely conservative and should slowly increase to capture its new normal.
'Given a much improved cost structure, strong balance sheet' and significant operational momentum, Mr. Hulshof wrote, Suncor is likely well-positioned to weather the current market volatility.
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