Suncor Energy announces project restarts

Carbon emission projects to start amid significant austerity

Suncor Energy Inc. reports it has restarted construction of two carbon emission-reducing projects paused last March as the COVID-19 pandemic erupted. One project is a $1.4 billion undertaking to install two cogeneration units at its Oilsands Base Plant. The second project is a new $300-million wind power plant in southern Alberta.

These projects come in the face of reports from the company that it will not increase capital spending this year despite higher oil prices. Suncor chopped operating costs by $1.3 billion or 12% in 2020 versus 2019 and reduced capital spending by $1.9 billion or 33% compared to the original guidance midpoint.

According to Suncor president and CEO Mark Little, “We’ve restarted construction of the cogen facility at Base Plant and the Forty Mile wind project, which is already accounted for within our current capital guidance.

“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 has expectations of capital spending of between $3.8 billion and $4.5 billion in 2021 while paying down between $1 billion and $1.5 billion of debt and repurchasing between $500 million and $1 billion in shares.

The company reported a Q4 net loss of $168 million on revenue of $6.6 billion, compared with a net loss of $2.34 billion on revenue of $9.6 billion in the same period of 2019, with both sets of numbers heavily influenced by asset write-downs. The current loss includes a $142-million after-tax transportation provision related to the recently cancelled Keystone XL oil export pipeline project. The company’s loss also includes a writedown of $423 million on its minority share of the White Rose and West White Rose offshore Newfoundland and Labrador oil projects.

Altogether, oil and gas production of 769,200 barrels of oil equivalent per day was down from 778,200 boe/d in the year-earlier quarter. Refinery crude throughput was 438,000 barrels per day, down from 447,500 bpd a year earlier.