Canada must ‘up its game’, says Suncor CEO

is expected to reach 90 per cent of its designed 194,000bpd capacity by the end of the year.

In the fourth quarter, the company also produced its first barrel of oil from Hebron, a project offshore Newfoundland that it has a stake in alongside Exxon Mobil Canada, Chevron Canada, Statoil SA and Nalcor Energy.

Suncor plans to spend roughly $5.5 billion per year growing its production in smaller projects, including debottlenecking efforts and repeatable projects — like the steam-based Meadow Creek East and West oilsands plants — to grow its production.

But don’t expect to see new mega-projects like Fort Hills announced without regulatory and fiscal changes, Williams said.

He said that if the discount Canadian heavy oil producers must accept for their barrels relative to the West Texas Intermediate benchmark oil price persists long-term or worsens, the company might consider adding equipment to its refinery in Montreal to process more heavy oil and further reduce its exposure to the differential.

About 20 per cent of the company’s production is subject to the discount between Western Canadian Select and West Texas Intermediate, which was $36.12 per barrel at close on Wednesday.

National Bank Financial analyst Travis Wood highlighted Suncor’s “limited WCS exposure” is one of the reasons the company remains his top stock pick. Other reasons include Suncor’s announcement of a roughly 12 per cent dividend increase Thursday and that it would buy back $2 billion worth of its own shares.

Suncor enjoyed higher oil prices and better utilization at its refineries and, as a result, increased its gross revenues 23 per cent to $4.1 billion in the fourth quarter, from $3.3 billion in the same period a year earlier.

The oilsands producer also boosted its net earnings 143 per cent to $670 million in the quarter, up from $276 million at the end of 2016.

Suncor also announced it had sold off its northeastern British Columbia lands in the Montney natural gas formation to privately-held Canbriam Energy in exchange for a 37 per cent stake in that company. Canbriam also received $52 million.