CALGARY — Suncor Energy says it plans to shift the majority of its oilsands production to in situ extraction by 2040, marking a significant long-term change in strategy for one of Canada’s largest energy companies.
The company says about 60 per cent of its bitumen output will come from steam-assisted extraction methods by 2040, up from roughly 30 per cent today. Currently, about 70 per cent of Suncor’s production comes from mining operations in northern Alberta.
Chief executive Rich Kruger said the shift is driven in part by the expected decline of production at the company’s Base Plant mine, which is anticipated to be largely depleted by the mid-2030s.
“All barrels are not created equal,” Kruger said during an investor presentation. “In situ delivers two times the relative cash flow per barrel compared to mining today.”
Suncor says the move is also aimed at reducing costs and increasing long-term cash flow, as in situ production generally requires less capital-intensive infrastructure than large-scale mining operations.
The company’s Firebag facility, an in situ project north of Fort McMurray, is currently its most profitable asset, producing about 245,000 barrels per day. Suncor has filed an application to increase the site’s capacity to 700,000 barrels per day.
The company expects to boost Firebag production to about 275,000 barrels per day by 2028 through optimization projects.
Suncor is also planning a new in situ development known as Lewis, which is expected to produce about 160,000 barrels per day and be developed in phases as mining output declines.
The strategy comes as Suncor looks to secure long-term supply to replace production from its Base Plant operations.
The company had previously considered expanding its mining footprint with a new open-pit project, but regulatory uncertainty has raised questions about whether such a development would proceed.
Suncor also said updated estimates show its bitumen reserves have increased by 11 billion barrels to a total of about 30 billion barrels.
The company expects overall upstream production to grow by about 100,000 barrels per day by 2028.
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