Fort McMurray wildfire contributes to $735M loss for Suncor
Fierce wildfires that swept through northern Alberta’s oilsands region in May have delivered a $735-million net loss for Suncor Energy.
The Calgary-based company said late Wednesday the fire that raged through the region meant it failed to produce about 20 million barrels of upgraded and raw bitumen from its oilsands projects. It said it spent $50 million related to evacuation and restart activities, offset by $180 million in cost savings while operations were suspended.
President and CEO Steve Williams said in a news release the company focused on evacuating employees and their families during the fire. After personnel were allowed to return to the projects, the focus turned to restarting operations and completing a maintenance turnaround at one of its base mine upgraders, with all operations back to pre-fire productivity by mid-July.
Watch below: On May 19, 2016, Alberta wildfire manager Chad Morrison credited the hard work of firefighters in preventing oil production sites in Northern Alberta from succumbing to the still-active wildfire which tore through Fort McMurray.
Suncor’s (TSX:SU) net loss for the three months ended June 30 equated to 46 cents per share. A year earlier, it reported second-quarter net earnings of $729 million or 50 cents per share.
The company recorded a second-quarter 2016 operating loss of $565 million, compared with operating earnings of $906 million in the same period last year.
Total second-quarter production was 330,700 barrels of oil equivalent per day, compared with 560,000 boe/d a year earlier. Total oilsands output was 177,500 barrels per day, less than half of 423,800 bpd in the second quarter of 2015.
Suncor has increased its ownership of Syncrude Canada this year from 12 per cent to over 53 per cent by buying Canadian Oil Sands Ltd., which had a 37 per cent stake, and adding Murphy Oil’s five per cent interest.
Suncor’s share of production from Syncrude in the second quarter increased to 35,600 bpd from 24,900 bpd a year earlier. Syncrude production was also affected by the wildfire but Suncor said it was also producing normal volumes by mid-July.
Earlier Wednesday, Calgary-based Athabasca Oil (TSX-ATH) reported its Hangingstone oilsands project had nearly recovered to the 9,000 bpd it had reached before being shut down for three weeks in May because of the wildfire.
It reported average production of 7,800 bpd in June and expected output of 8,600 bpd in July.
Athabasca said annual production is expected to average about 1,500 bpd less than it forecast in December. The project, which uses steam injected in wells to melt heavy bitumen and allow it to be pumped to surface, is expected to ramp up to its 12,000-bpd capacity before year-end.
© 2016 The Canadian Press