Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
Please consider a small donation if you think this website provides you with relevant information
| Statement |
|---|
| So all in all, across the portfolio in the upstream really happy with the performance in Q4 and that's continuing early into Q1 of 2024 |
| The achievements I just spoke to set us up well for 2024 and will continue to generate value for years to come |
| It's good for our sector |
| It's actually been pretty impressive watching the ramp up in the back half of 2023 and into 2024 with, as Jon indicated, kind of the second best quarter ever in Q4 |
| We also strengthened our credit ratings during the year with a credit rating upgrade from Fitch ratings to BBB stable and a change in our Moody's outlook from stable to positive |
| I'm proud of the team for their continued focus on safety and what they've accomplished over the year |
| And as I mentioned, we expect Q4 to be even bigger next year than it was this year, particularly as we kind of bring on more well pads right across the business, but I feel really good about how we've paced and stage the capital right across the upstream to ensure that those rates that, we put into our guidance are very achievable |
| Our upstream business continued to build on operating momentum |
| We increased production to nearly 810,000 barrels of oil per day, our highest quarterly number for this year and the second highest in the company's history |
| This is something we are extraordinarily proud of |
| We saw a particularly strong performance at our oil sands assets, most notably at Foster Creek |
| Jon, the upstream has had good momentum |
| The thing that's really positive is that the industry and the Alberta government and the federal government all have a shared goal of decarbonizing because it's -- good for the province |
| We expect to continuously improve our operating and financial performance in this business as we produce refined products into this pricing tailwind |
| We are well positioned as a company |
| But right now, we have resource and capability to utilize our steam most effectively and most economically to drive the highest shareholder return |
| And then our Asia business has been very strong for us as well, and that has continued into the New Year |
| Our Asia Pacific business continues to generate great -- with great predictability, generating about $1 billion of operating margin for the year |
| We delivered safe and reliable upstream performance throughout the year, while responding to the significant wildfire activity in our conventional areas in the spring and summer, and safely executed a major turnaround at Foster Creek in the second quarter |
| So, that's really, really positive |
| We have put in some new well pads at Foster and Christina, and we're starting to see the success of those well pads with strong production starting into January and continuing -- that will continue through the quarter |
| Overall, it's been a very strong quarter and a very strong start to 2024 for upstream businesses |
| That did persist in the January, but you also probably are well aware on February 1, we saw cracks really improve, and we quickly ramped up all of our assets to get the full rates to capture money in that market |
| The fourth quarter was another good step forward for our operated refining businesses |
| The Lloydminster upgrader and refinery demonstrated consistent and strong performance |
| The Toledo refinery ran steadily over the quarter and was able to take advantage of the wider light-heavy crude differentials |
| I'm very pleased with the improvements we continue to make in this business |
| So, we're pretty happy with what we're seeing |
| We have lots of opportunity and optionality to move our barrels down into this PADD 2 network and capture the margins out of the back end |
| So, really happy to see |
| Statement |
|---|
| The most notable item in the fourth quarter results was the weak Chicago crack crush environment and volatility quarter-over-quarter |
| The December crack averaged US$7.65 per barrel and at times gasoline cracks were negative, which caused us to respond by economically optimizing throughput |
| Now, the weak crack environment has persisted through the month of January with an average Chicago 3-2-1 benchmark of about US$5.50 per barrel |
| Our non-operated Borger Refinery underwent significant planned maintenance in the fourth quarter, and the operator experienced significant delays bringing the facility back up which impacted utilization and profitability in the quarter |
| Now, we continue to have some challenges to the Superior refinery |
| The Chicago 3:2:1 crack spread averaged US$13.24 per barrel, a decline of over 50% compared to the third quarter |
| This not only drove lower US refining operating margin in the fourth quarter, but also lower throughput |
| In that period of time, we had a pretty large turnaround at Borger refinery and the operator had a little bit of challenge starting that refinery back up |
| As mentioned, the upstream business was impacted by lower realized prices with wider WTI-WCS differentials |
| So you will recall, cracks really collapsed in the December time period |
| And contributed to a significant FIFO headwind in the US refining about $450 million as we processed higher priced crudes that were purchased in prior periods |
| And any time you take a new set of kit in a refinery that hasn't run for that length of time through its first winter, you do find some deficiencies and sure enough, we found some deficiencies |
| And the downstream was impacted by lower refined product pricing in the US and a negative FIFO impact |
| There's no doubt Superior has been a bit of a fist bite for us in starting a refinery that hasn't run in five years and rebuilding it has been a bit of an issue |
| Early in 2023, we signaled that the first two quarters of the year would be impacted by the startup of Superior and the delayed closing and start-up of Toledo |
| But the only unplanned downtime that we had in Lima was a short outage that we had on the ISO cracker |
| A little bit into December as well as some of our non-operated refineries took some economic run cuts |
| Obviously, in January, cracks were still pretty weak, as Jon alluded to in his opening remarks, but we saw that change in February and the kit ramped up the MAX throughput and did it reliably |
| It does impact your financial results |
| Look, we're continuing to see a lot of volatility in commodity prices |
Please consider a small donation if you think this website provides you with relevant information