July 23, 2020 / 2:44 PM / in 20 days

Western Canadian oil companies to restore all output cuts by year-end, says Suncor CEO

FILE PHOTO: Suncor Energy facility is seen in Sherwood Park, Alberta, Canada August 21, 2019. REUTERS/Candace Elliott

WINNIPEG, Manitoba (Reuters) - Western Canadian oil companies are moving to restore all of the production that they shut in as the novel coronavirus spread, due to improving prices, Canada’s second-biggest producer Suncor Energy said on Thursday.

Alberta, the main oil-producing province, curtailed some 1 million barrels of crude per day this spring - about 20% of Canada’s output - as lockdowns to curb the spread of the virus crushed demand for gasoline and jet fuel.

“Lots of Canadian crude is coming back on,” Chief Executive Mark Little said on a quarterly call with analysts. “By the end of the year, if we don’t have this upset with a second COVID outbreak, we expect essentially all crude in Western Canada to be back online.”

Western Canada made up nine-tenths of the country’s output, or 93%, in February, before the pandemic triggered curtailments the following month.

Suncor (SU.TO) is discussing with partners when to restore an idled production train at its Fort Hills site, Little said, adding there is a “reasonable chance” it will be online by year-end.

His comments had a more optimistic tone than just two weeks earlier, when he emphasized the uncertainty caused by countries starting and stopping their economic reopening plans.

It is unclear when the industry’s idled output may fully return online, said Cenovus Energy (CVE.TO) Executive Vice-President of Downstream Keith Chiasson, on a separate call. He estimated that some 500,000 barrels per day remains offline across the industry.

Suncor and Cenovus both reported quarterly losses on sharply reduced demand.

Suncor shares were down 4.2% in Toronto trading at C$22.97, while Cenovus shed 1.6% to C$6.57.

Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Bernadette Baum

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