CALGARY, Alberta, July 9 (Reuters) - Production at Suncor Energy Inc’s (SU.TO) newly expanded oil sands operations will not reach full capacity until the last half of next year, the company’s chief financial officer said on Wednesday.
Speaking at a Calgary oil sands conference, Ken Alley said he doesn’t expect production at the company’s northern Alberta oil sands project to reach its 350,000 barrel per day (bpd) capacity until the third or fourth quarter of 2009.
Suncor recently shut down part of its oil sands operation near Fort McMurray, Alberta, to tie in new equipment allowing the company to boost production by 100,000 barrels per day from the current capacity of about 250,000 bpd.
Reaching that new plateau will not happen quickly.
“We expect to see a ramp up of production through the second half of this year and the first half of next year,” Alley said. “So 350,000 barrels a day by the second half of next year.”
Suncor’s expansion will see the company’s capacity match that of Syncrude Canada Ltd, now the biggest oil sands producer.
The slow start up of the new equipment and production problems earlier this year at its existing operations spurred some analysts to speculate that the company will have to lower its current annual production target of between 275,000 and 285,000 barrels per day when it releases its second-quarter results next month.
“Given a longer-than-expected planned turnaround during the quarter and reliability issues encountered year-to-date, we expect the company to take down its full-year guidance... along with (its second-quarter) results,” Andrew Potter, an analyst at UBS Securities, wrote in a note to clients on Wednesday.
“We have reduced our 2008 oil sands production forecast to 240,500 (bpd) from 270,000 (bpd) previously.”
Alley declined to comment. “We’ll look at that and we’ll update it in the second quarter,” he said.
Suncor shares fell 26 Canadian cents to C$57.00 on the Toronto Stock Exchange on Wednesday. The stock has risen 19 percent over the past 12 months. ($1=$1.01 Canadian) (Reporting by Scott Haggett; Editing by Peter Galloway)