CALGARY, Alberta Feb 8 Suncor Energy Inc
, Canada's largest oil and gas company, increased cost
and capacity estimates on its Fort Hills oil sands project on
Wednesday, and said oil production was on track to start up in
The latest update on the giant mining project in northern
Alberta, which was sanctioned well before oil prices collapsed
in mid-2014, came as Suncor reported a stronger-than-expected
fourth-quarter profit, helped higher global crude prices and
improved reliability at the Syncrude oil sands project.
Suncor now expects Fort Hills to cost between C$16.5 billion
and C$17 billion ($12.5 billion to $12.9 billion) because of
construction delays caused by forest fires in northern Alberta
last year and other building costs.
The previous cost estimate for Fort Hills, which is a joint
venture with French oil company Total SA and Teck
Resources Ltd was C$15.1 billion.
Calgary-based Suncor also upped the expected capacity of
Fort Hills to 194,000 barrels per day from 180,000 barrels per
day, meaning the project's capital intensity will remain at
C$84,000 per flowing barrel of bitumen for Suncor.
Teck said in a statement it will record an after-tax
impairment charge of C$164 million in its fourth-quarter results
because of the increased capital cost.
"Bringing our key major growth projects, Fort Hills and
Hebron, to first oil by the end of this year continues to be a
top strategic priority for us," Suncor Chief Executive Officedr
Steve Williams said in a statement.
Hebron is an offshore project in Atlantic Canada and also
Suncor reported net earnings of C$531 million or 32 Canadian
cents per share. In the year-prior quarter, Suncor recorded a
net loss of C$2 billion, or C$1.38 a share, because of non-cash
impairment charges and an unrealised foreign exchange loss of
U.S. dollar-denominated debt.
Suncor's fourth-quarter operating profit, which excludes
one-time items, was C$636 million, or 38 Canadian cents per
share, versus a loss of C$26 million, or 2 Canadian cents per
share, in the year-ago period.
Analysts had predicted earnings of 29 Canadian cents per
share, according to Thomson Reuters I/B/E/S.
The company produced a record 738,500 barrels of oil
equivalent per day in the fourth quarter, up from 582,900 boepd
in the same period of 2015, due mainly to acquiring a majority
share in Syncrude.
Refinery throughput was 427,300 barrels per day in the final
quarter of 2016, down slightly from 430,200 bpd in the same
period a year earlier.
($1 = 1.3161 Canadian dollars)
(Reporting by Nia Williams; Editing by Lisa Shumaker)