Calgary-based Suncor Energy says its capital investment program is set at $5.4 to $6 billion in 2020 with upstream production expected to be between 800,000 to 840,000 barrels of oil equivalent per day (boe/d), an increase of about five per cent production.
“During 2019, we’ve demonstrated the value of our asset integration and flexibility through our focus on value over volumes, optimizing our product mix and transferring production quotas among our assets. This unique competitive advantage means we’re able to realize the highest value possible for our produced barrels, even during a period of production curtailment,” said Mark Little, president and chief executive officer, in a statement.
“Looking forward to 2020, we will continue to focus on value over volume, investing in high-return projects that are largely independent of pipeline constraints and commodity price volatility, to deliver on our $2 billion incremental free funds flow target by 2023,” said Little.
These initiatives position the company to be financially and environmentally sustainable, says Little, and drive long-term value, increasing shareholder returns, and lowering the carbon intensity of production.
The company said in a news release that the impact of the Government of Alberta’s mandatory production curtailment is factored into Suncor’s 2020 guidance which incorporates the use of crude by rail special production allowances.
“Although there continues to be considerable uncertainty on the impact and duration of the curtailment, the lower end of Suncor’s production guidance assumes curtailment remains in place at current levels for the full 2020 calendar year, while the upper end reflects an uncurtailed environment,” the release said.
Both Fort Hills and Syncrude remain adversely impacted because of the continued, disproportionate effect of curtailment because it is applied on a 2018 production basis when neither asset was operating at normal capacity.
“Oil related capital is flat year over year, while oil production is expected to increase by five per cent over 2019 midpoint guidance. Capital for previously sanctioned E&P step-out developments will increase by approximately $100 million over 2019 to $1.1 billion, and is inclusive of the Terra Nova asset life extension. The capital increase in 2020 is predominantly associated with projects driving the $2 billion of incremental free funds flow target by 2023 – the anticipated incremental capital spend on such projects in 2020 include $300 million for the newly sanctioned cogeneration facility, $150 million for additional investment in digital technology initiatives, and $50 million in connection with the completion of the Syncrude bi-directional pipelines.”
Mario Toneguzzi is a business reporter in Calgary.
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