Suncor Energy production continues to ramp up at Base Plant mine following restrictions due to fire
On August 16, 2020, Suncor reported it had experienced a fire at the secondary extraction facilities of its Base Plant mine, on August 14. As of August 29, production was restored to 165,000 barrels per day (bbls/d) of mined bitumen, and although initial repairs can allow the mine to operate at full rates, production has been restricted to manage bitumen quality into the upgraders, according to the company's most recent update.
According to Suncor, production is expected to continue to ramp up and will achieve full mining rates of approximately 300,000 bbls/d by the middle of the fourth quarter, as bitumen treatment facilities return to full operation. During this period of reduced production, selected maintenance activities, originally scheduled for later in the year, have been accelerated and are reflected in the updated production guidance. Repair costs are included within the corporate capital guidance; the majority of the repair costs are expected to be reimbursed through insurance proceeds to be received in 2021. Full year Oil Sands Operations cash operating costs guidance has been revised to $28.00 - $31.00 per barrel.
"Despite the operational incident and all the challenges of 2020 - unprecedented drop in oil prices, global pandemic and economic slowdown - Suncor has continued to focus on safety and maximizing value through enhanced performance and lowering costs," said Suncor president and chief executive officer Mark Little. "We're pleased to be making progress on lowering costs at Fort Hills and Syncrude; we've opportunistically advanced maintenance at Base Plant and Firebag, brought on additional capacity at Firebag, and we believe this disciplined and strategic approach lays the foundation for strong performance in 2021."
Suncor says starting in late September, Firebag in-situ production rates will be reduced to 110,000 bbls/d for approximately four weeks as they accelerate maintenance originally scheduled for 2022, and to enable expansion of the capacity of the facility by fully integrating the new, incremental emulsion handling and steam infrastructure. Following completion of this work, Firebag nameplate capacity is anticipated to increase by 12,000 bbls/d to 215,000 bbls/d, and is expected to be producing at normal capacity utilization (~95%) by early November.
Suncor is also working with the Fort Hills partners to restart the second primary extraction train in September, with initial gross production of approximately 120,000 to 130,000 bbls/d. This lays the foundation for improved cost effectiveness through optimization of the mine fleet, without the use of additional contractors, and includes the completion of the full deployment of autonomous haul trucks by the end of 2020. At this initial production level, Suncor expects to retain all of the previously announced sustaining capital savings and approximately 90% of the estimated operating costs savings. 2020 production guidance has been updated to 60,000 - 65,000 bbls/d, with a reduction to the Fort Hills cash operating costs per barrel range by $2 per barrel, to $32.00 - $35.00. Once the second train is operating, the owners will evaluate further increases in production.
Following these operational updates, production estimates for the third quarter are anticipated to be 305,000 - 320,000 bbls/d for Oil Sands Operations; this is comprised of 250,000 - 265,000 bbls/d of synthetic crude oil and approximately 55,000 bbls/d of bitumen. Full year corporate production guidance has been revised to 680,000 - 710,000 bbls/d.
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