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Suncor Energy Inc. has reported a second-quarter net loss of $614 million after it cut back on production to deal with sharply reduced crude prices amid lower global energy demand. Suncor's total production was 18.5% less than the 803,900 boe/d in the prior-year quarter, as it took measures including shutting down one of the two production trains at its Fort Hills oilsands mine in northern Alberta.
Canadian oil & gas firm, Suncor Energy’s profits jumped nearly three times in the second quarter of 2019. Climbing on the back of a deferred income tax gain of C$1.12 billion, net profit for Suncor rose to C$2.7 billion from C$972 million from a year earlier. Suncor’s total production buoyed up to 803,900 boepd, from 661,770 boepd in 2Q2018.
Canada-based Suncor Energy has reported a profit in its first quarter of this fiscal year. The company has been benefitted by the improved Canadian heavy crude pricing because of production cutback by Alberta. Suncor's net earnings increased to $899.62 million. Suncor has been largely profited from the crude oil and refined product inventory valuation. The earnings of the company have beaten the estimates of the analysts.
Canadian energy producer, Suncor registered a net loss of C$280 million in the fourth quarter. Total upstream production of Suncor jumped from 736,400 in the year-ago quarter to 831,000 barrels of oil equivalent per day. The loss is being attributed to the lower prices for Canada’s crude which has compensated for the profits from higher refinery margins.
CEO of Suncor Energy Inc announced that unlike its rivals, Suncor will not reduce its crude output to deal with low prices. This is because Suncor Energy is isolated from the rising price discounts that are applied to Canadian oil by US refineries. He said, “The higher-cost producers are having to pull back because they're not making any margin on their last barrel. We're not in that circumstance.”
Kick starting an investment driven oil-sands project, Fort Hills, Suncor Energy’s oil-sands mine had its formal opening on Monday. Clearing dense forest and dumping oily soils in giant trucks and processing it into heavy crude for U.S. refineries has made industry people hopeful. According to analysts, an era of big projects in the freezing wilderness of Canada will see a new dawn through minimized carbon emissions, combined with lower costs.
Canadian synthetic crude prices dropped on Thursday to the biggest discount to WTI futures since December 2013. An announcement from Suncor Energy about concluding repairs on the Syncrude Canada upgrader, which was shut after a power disruption in June, sent oil prices downhill. The production surge in Suncor’s new Fort Hills oil sands mine also contributed to the fall.
CEO of Suncor Energy Inc. has denied any further pipeline expansions in Canada “until it becomes clearer when new pipelines will be ready”. Suncor took this decision after the Canadian court upended the government’s consent of expansion of Trans Mountain pipeline. In Canada, the new pipelines construction has failed to match the rate of heavy oil production which is now disrupting the supply and creating pricing issues for the country.
The Syncrude outage last month had investors worrying, but the latest report on second-quarter profits of Suncor Energy have dispelled all the concerns. Despite the Syncrude facility shutoff, Suncor managed to generate $1.87 billion in cash from operations in the last quarter, a rise of 46% from 2Q2017. The Calgary-based oil sands firm has projected 740,000 to 750,000 boed in output this year.