Suncor has become the latest oil major to report forecast-beating figures for the first quarter, benefiting from robust demand for refined oil products and record-breaking production from the oil sands.
Suncor reported daily average production of 835,300 barrels over the three-month period, of which 785,000 bpd came from the oil sands-a record high. The total daily average for the quarter represented a 12.6% increase in the first quarter of 2023.
Another record was broken in oil refining, where the daily average rate reached 455,300 barrels-another all-time high and a 23.8% increase on the year.
Even so, net profit declined on an annual basis, to $1.17 billion (C$1.61 billion), which was down from $1.49 billion (C$2.05 billion) a year earlier. The company attributed the decline to lower oil prices and higher royalty payments during the period.
The robust first-quarter results follow an equally strong 2023 that saw the company's second-highest production rate ever and its "best-ever" quarterly performance in the final three months of the year-which got beaten by the first-quarter 2024 results.
Suncor is one of Canada's oil producers planning to boost production further as the expanded Trans Mountain pipeline enters into operation. The final approval for the pipeline was granted by the Canada Energy Regulator a week ago, allowing the infrastructure to begin carrying crude from Alberta to the country's west coast in British Columbia.
"Today marks a significant milestone, and we recognize that our regulatory oversight role continues as we ensure the pipeline is operated safely and the company delivers on its commitments," the chief executive of CER Tracy Sletto said.
The expanded Trans Mountain is what most Canadian oil producers base their future production plans on, including Suncor. All of them plan production expansions, too, and this has prompted analysts to warn that the 890,000 bpd in capacity that TMX will provide may not be enough for very long if all production growth plans pan out.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More
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