Suncor released its 2018 corporate guidance this week that includes a capital program of between C$4.5 billion and C$5 billion and average upstream production of 740,000 to 780,000 barrels of oil equivalent per day (boe/d). The midpoints of these ranges represent a year-over-year production increase of more than 10% and a capital spending reduction of approximately C$750 million.

Suncor said cash operating costs for its oils sands operations are $23/bbl-$26/bbl despite the five-year major planned maintenance turnaround at Upgrader 1. Oil Sands operations’ cash operating costs exclude Fort Hills and Syncrude. Fort Hills cash operating costs are expected to steadily decrease throughout the year as production ramps up to 90% of capacity and cash operating costs fall to the $20/bbl-$30/bbl range by the fourth quarter of 2018. Syncrude cash operating costs per barrel are expected to be $32.50/bbl-$35.50/bbl.

“During an extended period of low oil prices, we’ve demonstrated that we can generate significant free cash flow and strong returns for shareholders while continuing to drive down our operating costs and delivering significant future growth by executing two major projects,” said Steve Williams, president and CEO, Suncor. “With first oil at both Fort Hills and Hebron expected by year end, we’re bringing on new production at the same time as oil prices are rising to their highest level in several years.”

Suncor’s 2018 capital program is largely focused on sustaining capital given the major planned maintenance programs in both oil sands upgrading operations and downstream refineries, including a total plant turnaround at the Edmonton refinery. Approximately 25% of the 2018 capital spending program is allocated toward upstream growth projects in the oil sands and exploration and production businesses.