Suncor Energy Inc. is battling higher costs at its Syncrude oil sands project and said it would take longer than expected to restore production at the problem-plagued operation after a fire tore through the facility earlier this year.
Calgary-based Suncor late on Wednesday maintained its production target for the year but chopped expected output at the bitumen mining and upgrading project by 3.5 per cent to a forecast range of 130,000 to 145,000 barrels per day.
The company also increased its budget by 10 per cent to a range of $5.4-billion to $5.6-billion, citing in part higher costs at the aging oil sands project.
Production at the 350,000-barrel-per-day Syncrude project has been hampered for much of the year while the company works to repair damage from the March blaze. The company said it would return to normal operating rates by early August; it had previously targeted mid-July.
Despite reductions at Syncrude, Suncor said overall output for the year would fall in the range of 680,000 to 720,000 barrels of oil equivalent per day, citing expected increases from its offshore operations.
However, the company slashed its outlook for U.S. oil prices this year to $47 (U.S.) per barrel from $52 previously.
The revisions come as the company reported net earnings for the three months ended June 30 of $435-million (Canadian) or 26 cents per share, versus a year-ago loss of $735-million or 46 cents.
Following recent deals, the company is the largest owner of the Syncrude joint venture with a 54-per-cent stake. The other owners are Imperial Oil Ltd., Sinopec, CNOOC Ltd. and Mocal Energy.