Suncor (SU) Cuts Oil Supplies From Alberta Oil Sands Facility
Suncor (SU) delivers a force majeure notice to customers to inform a supply cut of as much as 20% in September due to a mechanical turmoil at its oil...
Suncor Energy’s SU joint venture Syncrude Canada Ltd. reduced oil supplies as a result of a mechanical turmoil at its oil sands site in Alberta, per a report by Bloomberg.
Canada is the world’s fourth-largest oil producer and Syncrude is one of the largest operators in the country's oil sands industry, with 50 years of effective operations and continuous innovation. Syncrude’s capacity of up to 360,000 barrels per day (bpd) constitutes about 10% of the country’s supply.
The facility, which upgrades mined bitumen from the oil sands of northern Alberta into light synthetic crude oil, produced nearly 275,000 bpd between January and May. Earlier this month, Syncrude owners delivered a force majeure notice to customers to inform a supply cut of as much as 20% in September. Notably, force majeure is an announcement of an unforeseeable event, which prevented a party to perform the contract.
Syncrude has been facing several operational issues since last year. In March 2020, Syncrude oil sands facility declared a similar force majeure event, following a fire incident at the plant. The fire broke out in one of Syncrude’s hydroprocessing units at its Alberta upgrading facility. The company reduced the production by about 20%.
The cut-off of Canada’s supply occurred as oil production in the Gulf of Mexico has been slow due to hurricane Ida, which struck the Louisiana coast last month and forced the temporary shutdown of most offshore production in the region. About 300,000 bpd of Gulf of Mexico crude production remains at a diminished level due to the storm’s impacts along with causing catastrophic damages to Louisiana's power grid.
Company Profile & Price Performance
Headquartered in Calgary, AB, Suncor is a premier integrated energy company.
Shares of the company have outperformed the industry in the past six months. Its stock has declined 4.1% compared with the industry’s 6.5% fall.
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Zacks Rank & Stock to Consider
The company currently carries a Zack Rank #3 (Hold).
One better-ranked player in the energy space is Eni SpA E, currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Eni’s earnings for 2021 are expected to increase 27.4% year over year.
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