Rocky Mountain Crude Differentials A Suncor Perspective

1
Rocky Mountain Crude DifferentialsA Suncor
Perspective

• Tim Kirwin
• Crude Trader
• April 2006

2
Rocky Mountain Crude Differentials

• Executive Summary
• Rockies production increased versus anticipated
  decline
• Canadian crude production increasing, however
  Padd 4 refiners have not increased Canadian crude
  percentage
• Infrastructure is inadequate to handle
  supply/demand disruptions
• Quality of common stream Guernsey is heavier than
  historical
• Heavy industry wide turnaround maintenance
• Unplanned refinery maintenance
• Signs of over supply already taking place prior
  to refinery outages

3
Rocky Mountain Fundamentals

• Demand
• Unplanned outages in December 2005 lowered demand
  for local and Canadian crudes.
• Demand has been further reduced by industry wide
  refinery maintenance (including Suncor) mandated
  by the EPA to produce ultra clean fuels.
• Suncor was not a sweet buyer February/March
• The east plant continued to run at full capacity
• Both plants expected back to full capacity in
  April (Suncor running at 85 as of April 25th)

4
Rocky Mountain Crude Differentials

• Refinery Supply
• Refineries are all different in what kinds and
  how much of any one crude they can run
• Refineries rarely able to process 100 of any
  crude type
• To fill up all refinery units and run at full
  capacity refineries make decisions based on
• Price
• Yield
• Availability
• LP determines optimum crude slate

5
(No Transcript)
6
Differential widened in 2005, major move due to
Suncor fire maintenance
7
Strong outright WTI prices have off-set wide
differentials
8
Suncor Energy overview

• Suncor is a major purchaser of Rockies crude
• We have increased domestic crude runs since
  purchasing the refineries
• Suncor focuses on fair pricing to foster strong
  long-term relationships with crude suppliers
• Suncors oil sands production is increasing, but
  that production and the infrastructure to take it
  to market are planned years in advance.
• In 2005 less than 8 of Suncor crude came from
  Oil Sands
• Suncor has invested over 400 million in refinery
  upgrades.
• reliable demand for Rockies crude
• local refining means lower fuel prices
• increased employment, economic benefits,
  taxes/royalties

9
Suncor has increased Rockies crude purchases
Barrels Per Day