February 22, 2010 / 5:34 PM / 8 years ago

UPDATE 2-Damaged Suncor upgrader out of service until April

* Normal operations to continue at second upgrader

* Lowers 2010 oil sands production forecast

* Analyst drops earnings forecast

* Shares fall 1 pct to C$31.62 in Toronto (Recasts to adds comments, details)

CALGARY, Alberta, Feb 22 (Reuters) - Suncor Energy Inc (SU.TO) said on Monday it expects a fire-damaged oil sands upgrader to be out of service until early April, forcing Canada’s biggest energy company to cut its production targets for the year.

Suncor said the extended repairs on its 125,000 barrel per day U1 upgrader, damaged in a Feb. 9 fire, will force it to lower its 2010 oil sands production forecast of 300,000 bpd issued less than three weeks ago.

While it makes repairs to the upgrader Suncor expects to produce just 210,000 barrels of bitumen and synthetic crude per day this month, and 230,000 bpd in March.

The company will release a revised production forecast for its massive oil sands operations near Fort McMurray when it releases its first-quarter earnings on May 4, but analysts are already lowering their profit expectations because of the cut in output.

“In response to today’s announcement, we have revised our (first-quarter) oil sands production volumes to 198,000 bpd (previously 298,000 bpd),” Andrew Potter, an analyst with UBS Securities, wrote in a note to clients. “As a result of these revisions, our 2010 operating earnings has been brought down to C$2.08 per share”

Potter had previously expected the company to earn C$2.24 per share this year.

Suncor shares fell 31 Canadian cents, or 1 percent, to C$31.62 by midday on the Toronto Stock Exchange.

Suncor’s second, larger upgrader, which converts bitumen from the oil sands into refinery-ready synthetic crude, is still operating. The 175,000 bpd facility had been returned to service following a December fire just days before the other unit was damaged.

The company will also ship raw bitumen to refiners in Canada and the United States that can process the extra-heavy crude.

Fires are not uncommon at the complex oil sands upgraders. Indeed Suncor has had to repair its facilities because of fires four times in the past two years.

While it is still looking into the cause of the blaze, Suncor said it will ask outside experts to review the company’s operations as it aims to improve the reliability of its facilities.

$1=$1.04 Canadian Reporting by Scott Haggett and Antonita Madonna Devotta; editing by Rob Wilson

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below