Imperial Sees Syncrude, Suncor Mines Sharing to Cut CostsJeremy van Loon
Producers seeking to take advantage of proximity of mines
Plan includes jointly operating trucks, storage facilities
Imperial Oil Ltd. and Suncor Energy Inc. are looking for more ways to shave costs at their Syncrude joint venture by sharing trucks, storage and other resources with nearby operations owned by Suncor, Imperial Chief Executive Officer Richard Kruger said.
Syncrude, which processes bitumen extracted from the oil sands into light synthetic crude, and Suncor’s Base Plant bitumen mine could share surplus facilities and even move fluids between them, Kruger said Wednesday during Imperial’s investor day. Logistics are among other opportunities the two mines could jointly operate to trim costs, he added, declining to provide details on how much spending could be reduced.
“You have two large mines literally across the street from each other,” he said. “There are still two different owners and it needs to make commercial sense. I think we’re going to achieve benefits over time.”
The two largest owners of Syncrude have already been sharing operational “best practices” to boost performance that has lagged at the mine, Kruger said. Suncor’s purchase of Canadian Oil Sands Ltd., previously Syncrude’s largest owner, as well as its acquisition of Murphy Oil Corp.’s stake, has helped to tackle the “complex governance structure” at Syncrude with fewer owners now, Kruger said. Suncor now owns almost 54 percent of Syncrude.
Imperial remains the second-largest Syncrude owner with a 25 percent stake. The oil producer is “committed” to its ownership in Syncrude which remains an important part of its portfolio, Kruger said.
Imperial is currently the operator at Syncrude and Kruger isn’t “too fussed about” which company has that title, he said in a briefing with journalists after the presentation with analysts. What matters is that operations are becoming more efficient and performance is being improved for shareholders, he said.
Demand for oil will continue to grow through 2040, with crude being the world’s largest source of energy, Kruger said. That means the company will expand its operations as opportunities arise, including for its Aspen reserves that will use steam technology, he said.