In November 2017, ExxonMobil’s Hebron project off Newfoundland, Canada’s easternmost province, became the country’s first new producing offshore oil project in 12 years. Pictured here is the tow-out of the platform that now sits permanently at the field in about 93 meters of water. Photo: Hebron Project
In the first quarter of 2018, Hebron production averaged 8,200 bbls/d and continues to ramp up ahead of schedule.
By Kevin Orland (Bloomberg) — Suncor Energy Inc. is barreling ahead on the ramp-ups of the Fort Hills and Hebron oil megaprojects as its refining operations protect it from the pipeline shortages and lower prices that are slamming competitors.
Canada’s largest oil producer by market value said Tuesday that Fort Hills, an oil-sands mine in Alberta, and Hebron, an offshore development along the nation’s Atlantic coast, are both ahead of schedule. The progress helped Suncor post output of 689,400 barrels of oil equivalent a day last quarter, topping analysts’ 685,630-barrel average estimate.
The megaprojects are coming online in the midst of a fierce battle over pipelines to haul away western Canadian crude. Kinder Morgan Inc. has threatened to abandon its Trans Mountain expansion over opposition from British Columbia, while TransCanada Corp.’s Keystone XL and Enbridge Inc.’s Line 3 remain in limbo amid regulatory issues and legal challenges.
See Also: Giant Platform Towed to Hebron Field Offshore Newfoundland and Labrador
While the pipeline bottleneck has widened the discount on Canadian crude, hurting competitors’ bottom lines, Suncor said it was able to fully make up for the lower prices with expanded margins in its refining business.
“The value of our integrated model was front and center this quarter,” Chief Executive Officer Steve Williams said in a statement.
Fort Hills has a targeted capacity of 194,000 barrels a day, and Hebron is expected to produce as much as 150,000 barrels a day, with 31,000 of those barrels net to Suncor.
Suncor rose 0.8 percent to C$49.25 at 11:29 a.m. in Toronto. The shares rose 5.8 percent this year through Tuesday, compared with a 4.1 percent decline for the S&P/TSX energy index.
© 2018 Bloomberg L.P
Sign up for our newsletter