Calgary-based Suncor Energy Inc. saw its earnings jump in the first half of the year, as oil demand rose and the pandemic receded, resulting in the North American retail unit standing out as the growth star.

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Maintenance turnaround projects, which limited production and sales by the refineries and oilsands operations during 2020 and early this year, also have been mostly completed to pave the way for improving performance.

“We’ve ramped up our assets and are positioned for a strong second half of 2021,” said President Mark Little in announcing results for the first six months of 2021. 

The company also plans to spend around C$500 million ($400 million) or 10% of its annual C$5 billion ($4 billion) capital budgets for greenhouse gas reduction initiatives such as clean power investments and carbon capture and storage.

Alberta oilsands mining and underground extraction, Suncor specialties that account for 93% of its crude output, grew by 10% in the first half to 652,700 b/d from 591,900 b/d in the same period of 2020.

However, output at the Fort Hills oilsands mine has been reduced to 45,000-55,000 b/d from 65,000-85,000 b/d. Fort Hills was built to have capacity to produce nearly 200,000 b/d. The mine’s operations at current production levels are set to remain through most of this year then transition toward full production in early 2022. Suncor had initially planned to transition to operating the two-train system  at normal rates during the third quarter.

Average prices fetched overall by Suncor’s fully upgraded light oil from bitumen mining and processing complexes rose to C$70.41/bbl ($56.33) in the first six months of this year from C$40.80 ($32.64) a year earlier. The market value of the firm’s raw bitumen production jumped 2.6-fold to C$46.41 ($37.13/b) from $17.65 ($14.12).

Refined product sales were 463,000 b/d, up from 438,000 b/d. However, gasoline and diesel demand was still 13% below the comparable 2019 pre-pandemic period.

“With the lifting of many restrictions in July, gasoline and diesel demand is estimated to have improved to 6% below the comparable 2019 levels,” said the management team. At the end of June, refineries were running at 94% of capacity.

Suncor recorded earnings of C$1.69 billion ($1.35 billion) or C$1.12/share (90 cents/share) in the first half of 2021. The profits reversed losses for the same period a year ago of C$4.14 billion ($3.31 billion) or C$2.71/share ($2.17).

Earnings for oilsands operations were C$769 million ($615.2 million) in the first half of 2021, up sharply from a loss of C$2.97 billion ($2.38 billion), caused by poor oil prices and accounting cuts to asset values in the first six months of 2020.

The Suncor chain oil refineries in Alberta, Colorado, Ontario and Quebec, along with 1,880 Petro-Canada branded service stations, achieved five-fold earnings growth to C$1.08 billion ($865 million) from C$214 million ($171.2 million) in the same period of 2020.