Tue, Jun. 16, 2:49 PM
- Royal Dutch Shell (RDS.A, RDS.B) gains approval from Canada's environment ministry for an offshore drilling project in Nova Scotia, saying the exploration program was "not likely to cause significant adverse environmental effects.”
- The approval is contingent on meeting several conditions, including mitigating the potential impact on fish and marine habitats.
- Shell plans to drill up to seven exploration wells over a four-year period in an area in the Shelburne Basin ~250 km off the coast.
- Shell holds a 50% stake in the project, while joint venture partner ConocoPhillips (NYSE:COP) has a 30% share and Suncor Energy (NYSE:SU) owns 20%.
Mon, Jun. 15, 5:41 PM
- The two biggest customers on Enbridge's (NYSE:ENB) newly reversed pipeline to carry Western Canadian oil from Sarnia, Ontario, to Montreal say they want to meet Canada's National Energy Board to find out why the pipeline's opening has been delayed by months.
- Valero Energy (NYSE:VLO) and Suncor Energy (NYSE:SU), whose respective 265K bbl/day Jean Gaulin refinery and 130K bbl/day Montreal refinery will benefit from the reversal to pump oil eastward to Quebec, say the delay in approving the start-up of the 300K bbl/day Line 9 pipeline is pushing up their costs and harming their operations.
- The controversial project will carry western Canadian crude to Quebec, replacing supplies currently shipped by rail or imported from abroad; the board approved the project in February but refused to let ENB open the 400-mile line until it met 30 conditions related to emergency response and pipeline integrity.
Thu, Jun. 11, 11:58 AM
- Suncor Energy (SU -2.2%) CEO Steve Williams says he supports a higher carbon tax for Alberta as long as the rate is increased gradually to ensure Canada’s oil remains competitive with other places.
- The current price of C$15/metric ton (US$12) that is applied to large industrial emitters "wasn’t a bad place to start and I think it can move on” with increases over time, Williams tells Bloomberg.
- A price for carbon that increases over time will provide oil companies with the long-term certainty they need, especially with oil sands projects that run for decades, the CEO says.
- Alberta was one of the first places in the developed world to implement a carbon tax in 2007, but Premier Notley’s new government has said it will roll out new regulations, including a possible change to the price of carbon, by the end of this month.
Tue, Jun. 9, 7:17 PM
- Pipelines such as TransCanada’s (NYSE:TRP) Energy East are the only viable way to develop Alberta’s oil sands, Total (NYSE:TOT) CEO Patrick Pouyanné says, adding that he believes pipelines are a safer way to transport crude oil than by rail.
- "I can only encourage Canadians to develop your own infrastructure and not to complain about the U.S. not accepting Keystone if you cannot develop your own pipelines to the east or to the west,” the CEO says.
- Acknowledging a major challenge facing Alberta’s oil sands is the logistical difficulty of transporting crude from the landlocked territory: “If you don’t have the pipelines, the oil sands will be stuck there in Alberta and it will be a real problem."
- TOT has two oil sands projects through JVs with Suncor Energy (NYSE:SU) which have been dealing with high production costs and low oil prices, along with competition from rising U.S. shale oil production.
Mon, Jun. 8, 7:03 PM
- Suncor Energy (NYSE:SU) says it has entered into a five-year agreement with Komatsu to purchase new heavy earthmoving trucks for some of its Alberta mining operations that will be "autonomous-ready,” meaning they are capable of operating without a driver.
- SU CFO Alister Cowan says the move eventually will result in 800 fewer jobs, adding that "at an average [salary] of $200K per person, you can see the savings we’re going to get from an operations perspective."
- Driverless trucks aren’t new to the resource industry, as miners Rio Tinto (NYSE:RIO) and BHP Billition (NYSE:BHP) use them at many of their operations, but job concerns are mounting through Canada's oil sands, where companies are looking for ways to cut costs and boost productivity amid the year-long plunge in oil prices.
- The use of autonomous trucks likely will not remain confined to SU; Shell Canada (RDS.A, RDS.B) says it is looking at their use but has no specific timeline in mind, and Imperial Oil (NYSEMKT:IMO) is not saying whether it is testing the trucks at its Kearl oil sands mine, which soon will double production capacity to 220K bbl/day.
Mon, Jun. 1, 3:58 PM
- Teekay Offshore Partners (TOO -1.1%) says it has signs new long-term contracts with a consortium of energy companies to provide shuttle tanker services for oil production activities on Canada's east coast.
- TOO says it will construct three Suezmax-size, DP2 shuttle tanker newbuildings with a South Korean shipyard for a fully built-up cost of ~$365M, with an option to order a fourth vessel if needed; the three firm vessels are expected to be delivered in Q4 2017 through H1 2018.
- The group of companies include Chevron (NYSE:CVX), Husky Energy (OTCPK:HUSKF), Murphy Oil (NYSE:MUR), Statoil (NYSE:STO) and Suncor Energy (NYSE:SU).
Mon, Jun. 1, 2:46 PM
- Canadian oil industry executives say the new plan by Alberta's premier to boost job creation by increasing oil refining and processing in the province instead of elsewhere is an unrealistic "dream" because costs and infrastructure needed for such facilities make it difficult to achieve.
- "There are huge hurdles," a Canadian Natural Resources (NYSE:CNQ) VP said at an RBC Capital conference in New York, such as the fact that U.S. refineries are already set up to handle the heavy crude that Alberta produces: “The best economic solution is to get that crude to these facilities,” said an exec at Imperial Oil (NYSEMKT:IMO), the Canadian company majority owned by Exxon (NYSE:XOM).
- Building a refinery in Alberta would have cost Husky Energy (OTCPK:HUSKF) double what it ended up paying for stakes in existing facilities in Ohio, according to the company's COO.
- The focus on creating jobs should not trump economics, Suncor (NYSE:SU) CFO Alister Cowan told the conference.
Sat, May 23, 10:50 AM
- Royal Dutch Shell (RDS.A, RDS.B) CEO Ben van Beurden endorses the view that the world’s fossil fuel reserves cannot be burned unless a way is found to capture their carbon emissions, but maintains that hydrocarbons will be needed for years to come.
- Justifying Shell's decision to drill exploration wells in the Alaskan Arctic, the CEO says: "The decline in existing production is always going to be faster than the decline that the most successful [low carbon] policies can create. There is always going to be a need for investment."
- But van Beurden criticizes calls for pension funds and foundations to divest from energy companies, in particular The Guardian's "Keep it in the Ground" campaign, and considers it a simplistic solution.
- Shell confirms it will attend an upcoming meeting with major European energy companies including BP, Total (NYSE:TOT), Statoil (NYSE:STO) and Eni (NYSE:E) to form a unified strategy on dealing with climate change issues ahead of U.N. talks that could force billions of dollars of oil, coal and gas to remain in the ground.
- In Canada, Suncor (NYSE:SU) CEO Steve Williams says his company is willing to pay a carbon tax but thinks it should apply to both companies and consumers; "If you look at carbon production in a modern economy, about 80% of it is at the point of consumption or the point of use," he says.
Fri, May 15, 2:45 PM
- Canada says it is committing to cut greenhouse gas emissions by 30% below 2005 levels by 2030, partly by introducing new regulations on its oil and gas sector.
- Environment Minister Aglukkaq says Canada will cut its emissions to 515 metric megatons by 2030 from 726 metric megatons in 2013; earlier this week, Ontario - Canada’s most populous province - set its own 2030 target of 112 megatons, which would represent a 46% cut from 2005 levels.
- To meet the new target, Canada will develop regulations to cut methane emissions from the oil and gas sector, such as industrial leaks and gas flares, as well as new rules to control emissions from the electricity and chemical sectors, including from nitrogen fertilizers.
- Relevant tickers: SU, ENB, TRP, IMO, CNQ, CVE, TCK, TAC, OTCQB:HUSKF, OTCQX:COSWF
Thu, May 7, 6:25 PM
- Canadian oil producers plunged for a second straight day as "all bets are off" after election results in Alberta raised concerns over the possibility of higher taxes for the companies.
- Among today's losers: SU -2.6%, OTCQB:HUSKF -5.2%, GTE -5.8%, PWE -5.7%, IMO -1%, CVE -1%, OTCQX:COSWF -3.4%, OTCPK:MEGEF -5%.
- COSWF is among the most exposed to a potential hike in royalties and stricter environmental policies, while electricity supplier TransAlta (NYSE:TAC) would suffer from the new government’s vow to shut coal plants sooner than planned, according to analysts at BMO Nesbitt Burns and RBC Dominion.
- Advice is split on owning stocks of companies that transport and process fuels in Alberta; Raymond James says stocks such as TransCanada (NYSE:TRP) and Enbridge (NYSE:ENB) are less directly exposed to reduced investment in the sector, but RBC advises to sell pipeline and midstream companies with operations in Alberta.
- Analysts also are divided about how much producers with oil refineries, such as SU and IMO, could offset losses from potentially higher royalties by boosting processing of crude in Alberta, a move pro-labor NDP has pledged to support.
Wed, May 6, 2:36 PM
- Canadian energy stocks are broadly lower after the shocking election result in Alberta raised questions about the future of the country's oil industry: SU -3.3%, ENB -2.8%, TRP -2.6%, IMO -2.3%, CNQ -2.3%, CVE -5.8%, OTCQB:HUSKF -1%, TCK -1.6%, TAC -4.1%, OTCQX:COSWF -6%.
- "Energy is such a critical issue to Alberta, I’m really not that concerned," ENB CEO Al Monaco says, but investors and analysts disagree.
- "It’s completely devastating" for energy companies and investors, saysCanoe Financial's Rafi Tahmazian of stated plans by the newly elected government to raise corporate taxes, review the government’s take of energy revenue, scale back advocacy for pipelines and phase out coal power more quickly.
- “If you are invested in energy stocks, you should be concerned,” says AltaCorp’s Jeremy McCrea, noting that drillers already face higher costs to extract oil and gas in Alberta than in many jurisdictions, so an increase in royalties would make the province even less competitive.
Wed, May 6, 7:38 AM
- In a stunning election result, voters in Canada's energy-rich Alberta province swept aside the four-decade hold on power by the ruling Progressive Conservative Party and elected an New Democratic Party majority government that wants to raise corporate taxes and increase oil and gas royalties.
- NDP leader Rachel Notley - who has vowed to raise the corporate tax rate to 12% at a time energy companies are reeling from layoffs and project cancellations amid weaker oil prices - is expected to succeed Jim Prentice as Alberta’s premier.
- Notley has said she would not lobby for the proposed Keystone XL pipeline to link Alberta’s oil deposits to refineries in Texas, and that she is against the Northern Gateway pipeline from Alberta to the British Columbia coast.
- She also has promised another review of oil royalties at a time other oil producing areas around the world that are also struggling with low oil prices are expected to make their terms more appealing.
- Relevant tickers: ENB, SU, TRP, IMO, CNQ, CVE, OTCQB:HUSKF, OTCQX:COSWF, XOM, BP, RDS.A, RDS.B
Fri, May 1, 7:20 PM
- Despite Pres. Obama's refusal to grant a permit for the northern cross-border leg of the Keystone XL pipeline (NYSE:TRP), "just as water will find its way through any crack in a foundation," Canada’s oil keeps streaming its way to Texas’ Gulf refineries, Financial Post's Claudia Cattaneo writes.
- While Keystone’s approval has sat stalled for six years, other pipelines have been built or expanded to ease bottlenecks: TRP's southern leg of Keystone XL and its Marketlink project from Cushing to Port Arthur, Enbridge (NYSE:ENB) and Enterprise Products' (NYSE:EPD) Seaway pipeline from Cushing to Freeport, and there's heavy oil coming by train and barge - it takes longer, costs more and is less efficient, but it's coming nevertheless.
- Even a prolonged slump in oil prices is not likely to stop Canada’s rush to the Texas coast: Both Imperial Oil (NYSEMKT:IMO) and Suncor (NYSE:SU) said this week their Q1 oil sands production levels are up 11% Y/Y, with IMO soon doubling production at the Kearl oil sands mine and new production beginning at its Nabiye operation.
Thu, Apr. 30, 1:12 AM
Wed, Apr. 29, 10:48 PM
Wed, Apr. 22, 6:53 PM
- Nomura came out bullish today on the energy E&P sector - issuing Buy ratings for MRO, PXD, EOG, CLR, APC, NFX, RRC, CNQ, CXO, ECA and SU - even as the firm does not foresee a V-shaped rebound in crude oil prices.
- Nomura believes core North American shale plays do not represent the economic marginal cost of supply in the world, which runs counter to commonly held views that largely see shale occupying the high end of the cost curve; thus as oil rebounds, so will investment in the shales, which should support prices, the firm says.
- In such an environment, Nomura says selecting stocks will depend on factors such as ”the reinvestment opportunity set, impact of oilfield technology, continued efficiencies, potential new geologic plays, management acumen and balance sheet strength."
- The firm is Neutral on DVN, HES, MUR, OAS, UPL, WLL, XEC, COG, COP and SWN; it rates NBL, APA, DNR, CHK and CVE as Reduce.
SU vs. ETF Alternatives
Suncor Energy Inc is an integrated energy company. Its operations include developing petroleum resource basin, Canada's Athabasca oil sands. It explores for, acquires, develops, produces & markets crude oil & natural gas in Canada and internationally.
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