For oil-sands ogre Suncor
We've grown used to seeing players like Royal Dutch Shell
Because the company faces an extra step of upgrading its bitumen resources into synthetic crude oil, Suncor needs to supersize its infrastructure every time it wants to bump up the bitumen flow. These overhauls are about as easy to pull off without a hitch as the refinery turnarounds executed by the likes of Valero
While two major downtime periods were anticipated, unplanned outages also contributed to the year's production dip. Suncor's difficulty in restarting its overhauled refinery in Ontario has been further compounded by a hydrogen supply interruption from Air Products & Chemicals
Yesterday's financial report wasn't all gloomy. Revenue pushed 13% higher for the year, thanks to elevated crude oil prices. Suncor sold a mix of oil products at a blended price of around $74 per barrel, while cash costs ran less than $28 a barrel. This pricing environment contributed to very healthy cash flows and returns on capital employed.
2007 was no barn-burner, but that's the way it goes when a company needs to take one step back to take several steps forward. As long as Suncor keeps upcoming projects like its Voyageur growth strategy moving ahead within a reasonable time frame, there's little reason to worry about this company's future.