Page 4 - NorthAmOil Week 31 2021

NorthAmOil COMMENTARY NorthAmOil

Oil sands giants report

second-quarter profits

Canada’s leading four oil sands producers have posted

profits for the second quarter of 2021, marking a

turnaround from losses a year ago

CANADA CANADA’S four leading oil sands producers – Suncor posted a net profit of CAD868mn
Canadian Natural Resources Ltd (CNRL), Sun- ($694mn), or CAD0.58 ($0.46) per share, up
WHAT: cor Energy, Cenovus Energy and Imperial Oil from a net loss of CAD614mn ($491mn), or
Canada’s four largest oil – have all reported profits for the second quarter CAD0.40 ($0.32) per share a year ago. The com-
sands players achieved of 2021. The results mark a turnaround from pany pointed to strong oil sands production –
profits in the second losses suffered in the second quarter of 2020 – including record in-situ volumes – boosting its
quarter of 2021. when the first wave of the coronavirus (COVID- overall output to 699,700 barrels of oil equiva-
19) pandemic had the most dramatic impact. lent per day in the second quarter. This marked a
WHY: Pandemic-related disruptions have contin- year-on-year increase from 655,500 boepd, and
Stronger oil prices and ued, but have since become more manageable came despite planned turnaround maintenance
improving demand as new restrictions are brought in and lifted on at the Syncrude Canada facility and operational
helped the companies’ a more piecemeal basis. Rising vaccination rates issues at the Fort Hills mine that have pushed
performances. have also encouraged a reduction in other meas- production at that project down while driving
ures aimed at preventing the spread of the virus, up operating costs.
WHAT NEXT: allowing some travel and industrial activity to “Suncor generated CAD2.4bn [$1.9bn] in
Demand for oil and resume. This, in turn, boosts demand for oil and funds from operations in the quarter while also
petroleum products is refined products, which is expected to continue completing significant turnaround activities
expected to continue rising. in the upstream and downstream businesses,”
rising, and new takeaway Crude prices, meanwhile, have surged by stated Suncor’s president and CEO, Mark Little.
capacity additions are around 78% over the last 12 months, with West “The improved cash generation enabled us to
coming. Texas Intermediate (WTI) at around $70 per increase shareholder returns to approximately
barrel, though Western Canadian Select (WCS) CAD1.0bn [$799mn], representing approxi-
typically trades at a discount, and is currently at mately 40% of our funds from operations and
roughly $55 per barrel. we’re targeting further debt reduction in the
latter half of the year in line with our previously
Second quarter announced capital allocation strategy.”
The announcements of second-quarter results Cumulatively, Suncor and Cenovus spent
from the oil sands giants began last week, close to CAD2bn ($1.6bn) on a combination of
with both Suncor and Cenovus reporting bet- share buybacks, dividends and debt repayment
ter-than-expected profits on July 29. in the second quarter.

Suncor’s production
improved despite
operational issues at its
Fort Hills mine.

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