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Calgary Herald
07-05-2025
- Business
- Calgary Herald
Suncor production hits record high, but sales volumes slow as inventory builds
A strong performance from Suncor Energy Inc.'s downstream operations, including record refinery throughputs and refined product sales, helped it beat analysts' first-quarter earnings expectations. Article content Article content The Calgary-based oilsands major 's adjusted operating earnings of $1.6 billion in the three months ending March 31 were down from $1.8 billion a year ago, but still beat analysts' expectations. Article content Article content Boasting about Suncor's ability to capture margin opportunities in the refining business relative to its peers, chief executive Rich Kruger said the company has emphasized running facilities at full capacity, driving down unit costs and trusting marketing teams to sell the product rather than throttling throughputs to meet anticipated demand. Article content Article content 'Last time I checked, I can never sell a barrel that I don't produce or refine,' he said on a conference call on Wednesday. 'We've turned that around and said, 'Get after it and we'll find valuable homes.' And I think our teams have risen to that opportunity.' Article content Suncor achieved record refined product sales of 604,900 bbls/day in the first quarter, compared to 581,000 bbls/d in the same period last year, driven by higher refinery throughputs and fuel sales across the company's retail Petro-Canada network. Article content For the third consecutive quarter, the company's refining utilization was above 100 per cent, with Suncor's refineries processing a record 483,000 bbl/d during the quarter, compared to 455,300 bbls/d a year ago, equating to a 104 per cent utilization rate. Article content Article content The company also had record upstream production of 853,200 barrels per day (bbls/d), marking a new high for the company, in part due to record-setting bitumen production at its Firebag in-situ mining facility and the resumption of offshore production at its White Rose facility in Newfoundland and Labrador. Article content Article content Capital spending was $1.09 billion, which was below analysts' estimates for the first quarter, but in line with Suncor's 2025 guidance that targeted a midpoint capital spending program of $6.2 billion, according to RBC Capital Markets. Article content Despite the upbeat tone on Wednesday's earnings call with investors, the company acknowledged there are headwinds on the horizon, with prices currently bouncing around US$60 per barrel for benchmark West Texas Intermediate. Suncor said WTI averaged around US$71.40/bbl during the first quarter of 2025. Article content 'I'm very pleased that the significant strides we've made over the last two years to improve our operational and financial performance significantly reduce our WTI break-even and strengthen our balance sheet,' chief financial officer Kris Smith said on the call.
Winnipeg Free Press
07-05-2025
- Business
- Winnipeg Free Press
Heavy lifting begins as Suncor starts refurbishing decades-old upgrader components
CALGARY – Oilsands giant Suncor Energy Inc. has begun a three-month outage at one of its upgraders so it can begin to replace enormous components first installed almost six decades ago. The Calgary-based company is in the midst of a multi-year project to replace eight original coke drums dating back to 1967 at its Base Mine site north of Fort McMurray, Alta., with the goal of extending the upgrader's life by 30 years. The drums, weighing 270 tonnes and standing nearly 30 metres, are used in the upgrading process, where tarry oilsands bitumen is converted into a lighter crude that can then be refined into fuel. Suncor's base plant and upgrader in the oil sands in Fort McMurray Alta, on Monday June 13, 2017. THE CANADIAN PRESS/Jason Franson In a website post last year when one of the drums was being transported from Edmonton to the mine, Suncor said the load took up the entire width of the road, including the shoulder lanes. The outage at the upgrader — one of two at the mine — began on May 1 and is expected to last 91 days. Shelley Powell, the Suncor senior vice-president in charge of major capital projects, says the first major crane lift of equipment was successfully completed over the weekend. The project is using one of the biggest cranes in the world, the Mammoet PTC210DS. 'We were really well prepared. We have all of the pre-work done, and that included actually doing some early planning and preparatory lifts,' Powell told Suncor's first-quarter conference call Wednesday. 'So we practised some of this stuff ahead of time to make sure we had the equipment in the right spot, we had people trained and ready to go, and everybody knew what their role was going to be.' Powell added that some of the operators involved in the project have experience doing similar heavy-lifting jobs elsewhere in the world. CEO Rich Kruger said collaboration between different teams is key to pulling off a project of this scale. 'We have to be seamless in our execution and our handoffs,' he told investors. 'We won't declare victory until we're done, but we feel quite good about our level of preparation and planning.' Desjardins Securities analyst Chris McCulloch said in a note that much is riding on the coke drum replacement going according to plan. 'Maintaining operational momentum will be pivotal for Suncor entering the heaviest stretch of scheduled maintenance this year,' he wrote. 'In our view, success of the Base Plant and other planned turnarounds will materially impact the company's ability to achieve its 2025 production guidance and (capital expenditure) targets, which we maintain have been conservatively set.' Late Tuesday, Suncor said its production for the first three months of 2025 was 853,000 barrels of oil per day, refining throughput was 483,000 barrels per day and refined product sales were 605,000 barrels per day. All three measures set new first-quarter records for the company. Net earnings for the first three months of 2025 were $1.69 billion, up from $1.61 billion during the same 2024 period. That amounted to $1.36 per share versus $1.25 per share. Winnipeg Free Press | Newsletter Winnipeg Jets Game Days On Winnipeg Jets game days, hockey writers Mike McIntyre and Ken Wiebe send news, notes and quotes from the morning skate, as well as injury updates and lineup decisions. Arrives a few hours prior to puck drop. Sign up for The Warm-Up Gross revenues were $13.33 billion, compared to $13.31 billion a year earlier. Adjusted operating earnings, a measure Suncor says provides a better comparison between quarters, were $1.63 billion, down from $1.82 billion, which it says was due to lower crude oil sales. Chief financial officer Kris Smith said Suncor is positioned well to weather a West Texas Intermediate crude price of US$60 per barrel, the level it's been hovering around in recent weeks. This report by The Canadian Press was first published May 7, 2025. Companies in this story: (TSX:SU)
