CALGARY – Suncor Energy Inc. CEO Steve Williams says its partners in the Syncrude oilsands mining operation are resisting taking action that could solve ongoing performance issues at the four-decade-old northern Alberta operation.
Suncor owns 58.74 per cent of the 350,000-barrel-per-day mine and upgrader but it is operated by a separate company and 25 per cent owner Imperial Oil Ltd. has a management services contract. The rest is owned by subsidiaries of Chinese companies Sinopec and CNOOC.
A sudden power outage at Syncrude in June knocked out the upgrader and it isn’t expected to fully recover until September, forcing Suncor to lower its production guidance for this year.
Williams said on a conference call Thursday morning the partners are divided on “commercial” matters, without being specific, adding he is frustrated with the lack of progress on settling those issues but is “pushing” the partners to come to an agreement.
He says the lack of co-operation means the goal of 90 per cent utilization and sub-$30-per-barrel operating costs at Syncrude aren’t likely to happen until 2020.
He adds a key development to improve Syncrude performance would be building pipeline links with Suncor’s nearby plant to allow better integration between the two operations.
“We know we will get a step change in the performance of Syncrude when we put these pipelines between Syncrude and our Base Plant,” said Williams.
“We’re not getting the sense of urgency or support we would like from our partners at the moment. So we’re working hard to try to get that but there are some areas where we’re having to push the partners because of its governance structure to start thinking differently.”
Suncor says oilsands production in 2018 is now expected to be 422,500 barrels per day, down from 440,000 bpd.
Companies mentioned in this article: (TSX:SU, TSX:IMO)