Insight
Suncor faces a Millennium-sized dilemma
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Suncor has operated the Base mining operations for over 50 years. Extending the mine requires regulatory sanction from Canada's federal government which is highly uncertain. This has prompted Suncor to investigate other options to secure bitumen production and keep the upgrading facilities running into the next decades. We assume the company will look to self-source its bitumen feedstock rather than purchase non-upgraded barrels from competitors. This report assesses various options for Suncor. We profile the Millenium Mine Extension economics assuming regulatory approval is granted and compare that to newbuild in situ assets already in Suncor's portfolio. Given the timeline required to develop new resources, project sanctions will need to occur in the next two years to ramp up by the mid-2030s when the bitumen feedstock would be needed. M&A also remains a route for Suncor to acquire bitumen feedstock and avoid development risks.
Table of contents
- Executive summary
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Millennium Mine Extension project background
- The extension faces a unique regulatory quagmire
- The project decision will inevitably be a political one
- Scenario 1: Millennium Mine Extension proceeds
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Scenario 2: organic in situ projects built to replace the mined bitumen
- No single operator has brought on this much in situ growth simultaneously
- Contrasting brownfield mine and greenfield in situ economics
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Wildcards: M&A provides more options
- Sunrise, CNOOC and MEG have different cons and none are enough on their own
- Mixing acquisitions and newbuild investment has risk-mitigating appeal
- The net zero / emissions overlay
Tables and charts
This report includes the following images and tables:
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Scenario1: Suncor bitumen productionScenario 1: Suncor capital spend profileScenario 2: Suncor bitumen production
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Scenario 2: Suncor capital spend profileEconomic outputsCumulative cash flows under Base priceTimeline of eventsAppendix: Map of Suncor Base Mine and vicinity leases and projects
What's included
This report contains:
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