Suncor Energy - $SU.CN

What’s Suncor Energy Business Model?

Suncor Energy, Inc. is a integrated energy company focused on developing the Athabasca oil sands basin. The Company extracts and upgrades oil sands into refinery feedstock and diesel fuel, explores for, develops and produces natural gas, refines crude oil and markets a range of petroleum and petrochemical products, and operates crude oil pipelines and retail petroleum stations.

What Suncor Energy is doing in more details?

Suncor Energy is strategically focused on developing one of the world’s largest petroleum resource basins ? Canada’s Athabasca oil sands.

uncor explores for, acquires, develops, produces and markets crude oil in Canada and internationally; the company transports and refines crude oil, and markets petroleum and petrochemical products primarily in Canada.

Suncor also operates a renewable energy business and conducts energy trading activities focused principally on the marketing and trading of crude oil, natural gas, byproducts, refined products, and power. Suncor reported gross proved and probable reserves of 6.7 billion barrels of oil equivalent.

Where Suncor Energy is Operating?

Suncor operates in three main segments: Oil Sands, Exploration and Production (E&P); and Refining and Marketing.

Suncor’s Oil Sands segment (nearly 40% of total revenue), with assets located in the Athabasca oil sands of northeast Alberta, produces bitumen from mining and in situ operations.

Bitumen is either upgraded into SCO for refinery feedstock and diesel fuel, or blended with diluent for refinery feedstock or direct sale to market through the company’s midstream infrastructure and its marketing activities.

The segment includes the marketing, supply, transportation and risk management of crude oil, natural gas, power and byproducts.

Suncor’s E&P segment (some 5%) consists of offshore operations off the east coast of Canada and in the North Sea, the Norwegian Sea and the Norwegian North Sea and onshore assets in Libya and Syria. This segment also includes the marketing and risk management of crude oil and natural gas.

Suncor’s Refining and Marketing segment accounts for about 55% of total revenue, consists of two primary operations, the refining and supply and marketing operations discussed below, as well as the infrastructure supporting the marketing, supply and risk management of refined products, crude oil, natural gas, power and byproducts.

This segment also includes the trading of crude oil, refined products, natural gas and power.

Where is the geographical reach of Suncor Energy?

The company has operations in Canada, Germany, Libya, the Norway, Syria, the UK, and the US. Canada accounted for about 85% of Suncor Energy’s revenues.

What is Suncor Energy’s Sales and Marketing Strategy?

The company’s primary markets for synthetic oil and bitumen production from Suncor’s Oil Sands segment, including PFT bitumen from Fort Hills, include refining operations in Alberta, Ontario, Quebec, the US Midwest and the US Rocky Mountain regions, and markets on the US Gulf Coast.

Diesel production from upgrading operations is sold primarily in Western Canada and the US.

Oil and gas production from East Coast Canada and Offshore U.K. & Norwayis either marketed by the company’s Energy Trading business, acting as a marketing agent, or sold to its Energy Trading business, which then markets the products to customers under direct sales arrangements.

Suncor’s retail service station network operates nationally in Canada primarily under the Petro-Canada brand. This network consists of more than 1,560outlets across Canada.

In addition, refined products are marketed through independent dealers and joint arrangements. Suncor’s Canadian retail network had annual sales of gasoline motor fuels averaging approximately 4.1 million liters per site.

Suncor’s Colorado retail network consists of some 45 owned or leased Shell, Exxon or Mobil branded outlets. Suncor also has product supply agreements with about 135 Shell-branded sites in both Colorado and Wyoming, and with more than 60 Exxon and Mobil-branded sites in Colorado.

Suncor’s wholesale operations sell refined products into farm, home heating, paving, small industrial, commercial and truck markets. Through its PETRO-PASS network, Suncor is a national marketer to the commercial road transport segment in Canada.

Suncor also sells refined products directly to large industrial and commercial customers and independent marketers.

What is Suncor Energy Financial Performance?

The company’s revenue for fiscal 2020 decreased to $25.1 billion compared from the prior year with $39.0 billion.

Net loss for fiscal 2020 increased to $4.3 billion compared from the prior year with a net income of $2.9 billion.

Cash held by the company at the end of fiscal 2020 decreased to $1.9 billion. Cash provided by operations and financing activities were $2.7 billion and $1.8 billion, respectively. Cash used for investing activities was $4.5 billion, mainly for capital and exploration expenditures.

What is Suncor Energy Future Strategy?

Following a successful commercial-scale evaluation in 2018, the company began a phased implementation of AHS at its operated mine sites. AHS were deployed at the North Steepbank mine in 2018 and at Fort Hills in 2020. Full implementation at the Oil Sands Base Millennium mine is expected to be completed in 2024.

Autonomous haul trucks, which operate using GPS, wireless communication and perceptive technologies, have demonstrated an ability to maneuver safely, effectively and efficiently in Suncor’s operating environment and offer a number of advantages over existing truck and shovel operations, including enhanced safety performance, better operating efficiency and lower operating costs.

What is Suncor Energy’s Background?

To focus on its growth markets and to pay down debt, in 2013 the company agreed to sell its conventional natural gas business in Western Canada to a Centrica and Qatar Petroleum partnership for $1 billion.

To further develop its oil sands assets, in 2010 the company formed a strategic alliance with TOTAL.

As part of the deal, France-based TOTAL paid Suncor Energy about $1.7 billion to acquire 19% of Suncor Energy’s 60% interest in the Fort Hills mining project and a 49% stake in the Voyageur Upgrader project near Fort McMurray.

Suncor Energy acquired about 37% of TOTAL’s stake in the Joslyn project.

Boosting its profile as an integrated energy company, in 2009 the company acquired Petro-Canada in a $15 billion deal. The acquisition created an energy behemoth with extensive holdings in oil sands, solid conventional exploration and production assets, and a major refining and retailing network.

Following the Petro-Canada deal the company divested about $1.5 billion of non-core assets in Western Canada, the US, Trinidad and Tobago, and the North Sea. In 2010 Suncor Energy sold its North Sea exploration assets (of Petro Canada Netherlands) to Dana Petroleum for $393 million.

Later that year it sold a pair of natural gas properties in Alberta to a subsidiary of Abu Dhabi National Energy Company for $285 million. It also sold its Wildcat Hills assets, which produce some 80 million cu. ft. of natural gas per day, to Direct Energy for about $360 million.

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