Oil sands petroleum extraction is already profitable

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Oil sands petroleum extraction is already profitable

Monday, January 5th, 2009 | Environment |

I learned something from a commenter in the Peak Coal thread (italicized portion is from a previous commenter):

“Oil shale and oil sands are not profitable right now, we’re not sure we can make it work as much as we need it to, and might not be easy enough to get out of the rock at a profit or even at a break even point.”

I can’t comment on Oil Shale, but this is a pretty ridiculous statement for Alberta Oil Sands. Go to finance.google and look up the ticker for Suncor Energy (SU on the NYSE). Looks pretty profitable to me. $12b in gross profit in 2007, in business for over 40 years in the Oil Sands. Their operating break-even from current facilities today is about $25/bbl. And if oil gets to $25/bbl and stays there for a while, then “Peak Oil” will be demonstrated as Peak BS.

Sure enough. You can see Suncor’s stock listing on Google Finance. From their 2008 Q3 financials:

Suncor Energy Inc. recorded third quarter 2008 net earnings of $815 million ($0.87 per common share), compared to $627 million ($0.68 per common share) for the third quarter of 2007. Excluding unrealized foreign exchange impacts on the company’s U.S. dollar denominated long-term debt, and project start-up costs, earnings for the third quarter of 2008 were $971 million ($1.04 per common share), compared to $538 million ($0.58 per common share) in the third quarter of 2007.

The increase in earnings was primarily due to improved price realizations for our oil sands products. This was partially offset by an increase in operating expenses, product purchases and Crown royalties in our oil sands business.

1 Comment to Oil sands petroleum extraction is already profitable

Stan in Sugar Land
January 6, 2009

Not only is it profitable, but there are new technologies starting to emerge that will reduce the cost and the environmental footprint. The funny part - these were developed by some folks outside the oil sands industry.