Suncor rejects US refinery amid profit increase

Source: Energy Digital

Date :4/25/2008 5:07:14 AM

Suncor Energy Inc. yesterday announced 2008 net earnings of $708 million, compared to $576 million in the first quarter of 2007.

Despite this, another US refinery is not considered a ‘must have’ by the Calgary-based company, according to Chief Executive Rick George - although he admitted falling asset prices have made the option more interesting.

Suncor may forego new refining capacity altogether, instead selling oil sands bitumen as opposed to an upgraded synthetic crude, with Mr. George saying that, “Ensuring a steady supply of bitumen is key to boosting production rates at our expanded oil sands facilities.”

Production

The company has seen an increase in cash operating costs per barrel from $26.30 per barrel in the first quarter of 2007, to $31.55 per barrel in the first quarter of this year. The firm identified an increase in third party bitumen costs, higher maintenance costs and employee expenses as the reasons behind increasing costs.

Suncor has a $20.6 billion expansion planned in northern Alberta, where it will raise the output of oil sands production to 550,000 barrels a day by 2012. If achieved, they will become the country’s biggest oil sands producer.

April 25, 2008