canada’s oil sands: challenges and opportunities mike ashar executive vice president suncor energy...
TRANSCRIPT
Canada’s Oil Sands: Challenges and Opportunities Mike AsharExecutive Vice PresidentSuncor Energy Inc.
Woodrow Wilson ForumOctober 17, 2005Washington DC
Legal Notice This presentation contains certain forward-looking statements, including statements about Suncor's
growth strategy and expected and future production, operating and financial results that are based on Suncor's current expectations and assumptions. The forward-looking statements, identified by words such as “vision”, “goal”, “targets”, “estimates”, “plans” and “objectives”, are not guarantees of future performance. Actual results may differ materially as a result of risks, uncertainties and other factors, such as changes in general economic, market, regulatory and business conditions; fluctuations in commodity prices and currency exchange rates; the successful and timely implementation of capital projects; the accuracy of cost estimates and uncertainties resulting from potential delays or changes in plans, among others. See Suncor's current Annual Report and other documents Suncor files with securities regulatory authorities for further details, copies of which are available from the company. The forward-looking statements speak only as of the date hereof, and Suncor undertakes no duty to update these statements to reflect subsequent changes in assumptions (or the trends or factors underlying them) or actual events or experience.
Unless noted otherwise, financial information is for the most recent quarter or year end.
A boe conversion ratio of six thousand cubic feet of natural gas: one barrel of crude oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Accordingly, boe’s may be misleading if used in isolation.
Suncor Energy at a Glance Integrated energy company with more than
4,500 employees Crude oil production capacity of 260,000
barrels/day Refining capacity of 160,000 barrels/day Market capitalization about US$24 billion
0
2
4
6
8
10
12
14
ExxonMobil
Petrobras Chevron BP Total RD Shell ConocoPhillips
Suncor
proved resources
All company data, except Suncor, is based on 2003 year-end proved reserves. Under U.S. reporting requirements, companies cannot disclose resources. Accordingly, Suncor’s reserve and resource estimate will not be comparable to those made by U.S. companies. Source: Oil and Gas Journal
11 billion barrels reserves and
resourcesResources
Comparative Advantages No exploration costs High recovery rates Competitive fiscal regimes Secure connection to
North American markets
Suncor Oil Sands Production Growth
94 123
206 217 227260
350
500
50
0
100
200
300
400
500
600
1998 2001 2002 2003 2004 2005* 2008* 2010 to2012*
Thousands of barrels per day
*Production capacity targets **Includes in-situ bitumen production
**
Challenges Costs – operating, capital and labor Environmental impacts Pipeline capacity Refinery capability
Operating costs Industry average about US$20 for upgraded
product Constant cost pressure Natural gas a major cost component risk
Capital Costs US$35 billion planned in next five years Industry working to manage project costs and
infrastructure impacts Peak labor force of 25,000
Environmental Issues Must manage impacts to air land and water Collaboration is key Progress is being made
Cushing
Fort McMurray
Montreal
Toronto
Gretna
Regina
Hardisty
Kerrobert
Catlettsburg
Casper
Clearbrook
Superior
Salt Lake CitySinclair
Cheyenne
DenverMcPherson
Ponca CityTulsa
El DoradoCoffeyville
ArdmoreMemphis
Billings
Great Falls
Toledo
Canton
Detroit
Chicago
Corpus Christi
HoustonPort Arthur
New Orleans
Lake CharlesTexas CityFreeport
Puget Sound
San Francisco
Bakersfield
Los Angeles
Borger/SunrayArtesia
El Paso Big Spring
Buffalo
VancouverEdmonton
Wood River Patoka
Robinson
Lima
St. Paul
Mandan
Cromer
Canadian Supplied
Not Canadian SuppliedSource: Enbridge, Terasen, ExxonMobil
Pipeline Access
Refinery Capability: Heavy/Sour Crudes Processed in the U.S.
0.8
0.9
1
1.1
1.2
1.3
1.4
1.5
1.6
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
Feb'05
Apr'05
% S
ulp
hu
r
28
29
30
31
32
33
34
35
AP
I
Sulfur
API Gravity
Average API is going down as more Canadian crude is heading to the US
Source: EIA, January 2005
% of Sulphur has been increasing from 0.9% to 1.5
Canada’s Oil Sands: Challenges and Opportunities Mike AsharExecutive Vice PresidentSuncor Energy Inc.
Woodrow Wilson ForumOctober 17, 2005Washington DC