The charge for the failing Voyageur operation resulted in a fourth-quarter net loss of $562 million.
Photo credit: Suncor Energy
CALGARY&mdashSuncor Energy Inc. reported a fourth-quarter net loss as it took a big charge related to its long-shelved and economically “challenged” Voyageur oilsands upgrader.
Canada’s biggest energy company said the net loss for the last three months of 2012 was $562 million compared with net earnings of $1.43 billion during the same period a year earlier.
The results were hit by an after-tax impairment charge of nearly $1.49 billion for Voyageur, a multibillion-dollar oilsands processing complex which its previous owner, Petro-Canada, shelved as costs soared and crude prices crashed in late 2008.
Suncor took over Petro-Canada in 2009.
Voyageur, along with the Joslyn and Fort Hills oilsands mines, is part of a joint venture Suncor inked with the Canadian arm of France’s Total SA just over two years ago.
Suncor is reviewing each of those projects and has said they might not go ahead at all if they are found to be not economically viable.
The partners at Fort Hills&mdashTotal, Suncor and Vancouver-based miner Teck Resources Ltd.&mdashexpect to make a decision on whether to go ahead with the mine during the second half of 2013.
It’s not clear yet when Total and Suncor will make a decision on the Joslyn mine.
A call on whether to go ahead with building the Voyageur upgrader is expected by the end of the first quarter, but the company signalled in its quarterly release that it’s not looking promising.
“Suncor’s view is that the economic outlook for the Voyageur upgrader project is challenged. Suncor and its partner continue to work diligently towards determining an outcome for the project,” it said.
“The partners have been considering options for the project, including the implications of cancellation or indefinite deferral.”
Suncor CEO Steve Williams has previously said that booming light oil production in the U.S. is calling into question the economic viability of upgrading heavy, tarry oilsands crude into a lighter product.
In the meantime, spending on the Voyageur project will be minimized until a decision is made.
Without the Voyageur charge, Suncor’s operating earnings were $1 billion during the quarter, or 65 cents per share. That missed the average analyst estimate of 76 cents per share, according to Thomson Reuters.
Suncor’s total production for the quarter averaged 556,500 barrels of oil equivalent per day, versus 576,000 barrels during the same 2011 quarter.