Canada's biggest integrated oil and gas firm Suncor Energy said on Monday that its total upstream production set a quarterly record of 831,000 barrels of oil equivalent per day (boed) in the fourth quarter of 2018, just ahead of Alberta's oil production cuts of 325,000 bpd beginning January 1.
Suncor Energy's upstream production in Q4 jumped by 12 percent compared to the third quarter, reflecting "significant investment developing Fort Hills, and Suncor's ongoing operational excellence focus across its assets, particularly at the Syncrude joint venture," the company noted.
Suncor Energy's oil sands operations produced some 433,000 bpd in Q4.
While Suncor and other Canadian producers were lifting oil production last year, takeaway capacity constraints and maintenance at U.S. refineries in the fall of 2018 drove down the price of Western Canadian Select (WCS)-the benchmark price of oil from Canada's oil sands-as low as $14 a barrel in October and November, with its discount to the U.S. benchmark WTI at around $50 a barrel.
The Alberta government moved in to shore up the price of Canadian heavy oil and in the most drastic measure yet, the province of Alberta mandated an oil production cut of 325,000 bpd for three months starting January 2019. The glut and the resulting low oil prices cost Canadians US$58.6 million (C$80 million) a day, Premier Rachel Notley said in early December.
Shortly after the announcement of the production cuts in Alberta, Suncor issued its 2019 capital program and production outlook, in which it expects average upstream production of 780,000 boed to 820,000 boed for 2019. The midpoint of the range represents an annual production increase of around 10 percent-including estimated mandatory production curtailments-from some 730,000 boed in 2018.
"Although considerable uncertainty on the impacts of the curtailment remains, Suncor's production guidance assumes the mandatory production curtailments are in place for three months before declining to 30% of initial levels for the remainder of 2019," Suncor said in its 2019 guidance.
In today's release, Suncor kept the 2019 production guidance issued in December. Fourth-quarter financials will be issued on February 5, the company said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More