After a power outage at the Syncrude oil sands site in June, Imperial Oil says it is looking to cut its dependence on the Suncor majority-owned plant. Company photo via Twitter.
Imperial holds 20 per cent stake in Syncrude
Imperial Oil says it is looking to lessen its reliance on the Syncrude oil sands operation after an unplanned outage at the 360,000 barrel per day (b/d) facility impacted Imperial’s Strathcona refinery.
Last month, a power transformer failed, shutting down the Syncrude plant, in which Imperial holds a 25 per cent stake. The oil sands facility is majority owned by Suncor Energy.
Syncrude accounts for 10 per cent of Canada’s total crude production and nearly all of Imperial’s output feeds the Strathcona refinery which produces gasoline and other petroleum products. The operation makes up one-third of the refinery’s oil supply, according to Imperial’s Chief Executive Rich Kruger.
“When Syncrude has an unplanned event, the supply folk at Strathcona do need to scramble, and unfortunately they have had to scramble the last few years more than they would like,” Reuters reports Kruger said on a conference call with analysts.
Kruger adds that at this time, Imperial is undergoing testing of other types of light and synthetic crude to see if it should enter into other supply agreements for the Strathcona refinery.
“The Syncrude events are more troubling for their impact on Strathcona. It does affect the ability to run that refinery at the highest level of reliability without disruptions.”
Suncor says that some of Syncrude’s production has been restored and the company expects full production to be online in September.
In its second-quarter financials, Imperial Oil reports it missed analysts’ estimates by a wide margin. The company says it incurred higher-than-expected costs from planned maintenance at various facilities.
The company, which is majority owned by Exxon Mobil, reported its gross production rose in Q2 to 336,000 barrels of oil equivalent per day up from 331,000 boe/d in the second quarter of 2017.
As of 2:07 p.m., EDT, shares in Imperial Oil had dropped 68 cents to $43.37.