Suncor credits focus on safety among factors behind soaring oil production

The sign for Suncor Energy in downtown Calgary. Photo: Jeff Whyte/Adobe Stock

By Amanda Stephenson

Suncor Energy Inc.’s share price jumped Wednesday as the company reported its fourth quarter oil output was its second-highest quarter ever.

The Calgary-based company announced upstream production in the fourth quarter of 2023 of 808,000 barrels per day. With the strong fourth-quarter output, Suncor said it has met its corporate forecast provided in November 2022 and recorded an annual average upstream production of 746,000 barrels per day.

Suncor’s December production averaged more than 900,000 barrels per day, the company’s best single month performance ever.

The company’s stock price rose on the news, closing 5.93 per cent higher on Wednesday at $45.34.

The strong production numbers come less than a year after former Imperial Oil head Rich Kruger was named Suncor’s new CEO, with a mandate to improve the company’s flagging fortunes. The company had been under pressure from investors for its lagging share price, as well as a string of operational and safety issues.

Kruger said in a news release Wednesday that Suncor’s newly announced production numbers are the result of a heightened focus on “the fundamentals of safety, operational excellence and reliability.”

“This is a tangible example that when we set a commitment, we will be laser focused on meeting it,” he said.

Rich Kruger, CEO of Suncor. Photo: LinkedIn

In a memo to clients, Eight Capital analyst Phil Skolnick said Suncor ended the year on a “very strong note.”

“We believe it provides a good degree of confidence in the performance potential of the overall asset base,” he said.

As part of its wider efficiency push, Suncor completed 1,500 job cuts in 2023, a move the company said is expected to save $450 million per year.

Suncor’s fourth-quarter output was the result of 758,000 barrels per day of oilsands production and 50,000 barrels per day from the company’s exploration and production operations, including the ramp-up at the Terra Nova offshore oilfield.

Suncor’s net synthetic crude oil production was 476,000 barrels per day and net non-upgraded bitumen production was 282,000 barrels per day resulting in total oilsands production of 758,000 barrels per day for the quarter.

Suncor said its downstream operations posted average refining utilization of 97 per cent in the fourth quarter.