For the first time in five years, Suncor Energy is entering a new capital budget cycle without consideration of major project construction. Instead, the company’s outlook is weighted towards major planned maintenance programs.
With the impending completion of the Fort Hills oilsands mine and Hebron project offshore Newfoundland and Labrador, Suncor is dropping its 2018 capital program outlook by approximately $750 million.
The company expects to spend between $4.5 billion and $5.0 billion in 2018, compared to between $5.4 billion and $5.6 billion this year.
Hebron received corporate sanction in December 2012, while Fort Hills got the green light in October 2013. First oil from both projects is expected before the end of the year, with Fort Hills adding net production capacity to Suncor of 96,520 bbls/d and Hebron bringing 30,000 bbls/d net at peak.
Source: Suncor Energy
2017 estimate shows high point of $5.4 billion to $5.6 billion range; 2018 estimate shows high point of $4.5 billion to $5.0 billion range.
Approximately 25 percent of Suncor’s 2018 capital budget is allocated toward growth projects, compared to 50 percent in 2017 and 60 percent in 2016.
“With first oil at both Fort Hills and Hebron expected by year end, we’re bringing on new production at the same time as oil prices are rising to their highest level in several years,” Suncor CEO Steve Williams said in a statement.
Suncor’s 2018 capital program is largely focused on sustaining capital, the company says, with major maintenance programs planned in both its oilsands upgrading operations and downstream refineries including a total plant turnaround at the Edmonton refinery.
Including expectations for Fort Hills to reach 90 percent of capacity in fall 2018, Suncor expects production to increase to between 740,000 to 780,000 bbls/d next year, up from 680,000 to 720,000 bbls/d in 2017.
This article appeared first published on JuneWarren-Nickle’s Energy Group (JWN).