An aerial view of Suncor's Firebag oilsands project north of Fort McMurray, Alta, which set a record for bitumen production. (Credit: Ryan Jackson/Postmedia)

A strong performance from Suncor Energy Inc.’s downstream operations, including record refinery throughputs and refined product sales, helped it beat analysts’ first-quarter earnings expectations.

The Calgary-based oilsands major‘s adjusted operating earnings of $1.6 billion in the three months ending March 31 were down from $1.8 billion a year ago, but still beat analysts’ expectations.

Boasting about Suncor’s ability to capture margin opportunities in the refining business relative to its peers, chief executive Rich Kruger said the company has emphasized running facilities at full capacity, driving down unit costs and trusting marketing teams to sell the product rather than throttling throughputs to meet anticipated demand.

“Last time I checked, I can never sell a barrel that I don’t produce or refine,” he said on a conference call on Wednesday. “We’ve turned that around and said, ‘Get after it and we’ll find valuable homes.’ And I think our teams have risen to that opportunity.”

Suncor achieved record refined product sales of 604,900 bbls/day in the first quarter, compared to 581,000 bbls/d in the same period last year, driven by higher refinery throughputs and fuel sales across the company’s retail Petro-Canada network.

For the third consecutive quarter, the company’s refining utilization was above 100 per cent, with Suncor’s refineries processing a record 483,000 bbl/d during the quarter, compared to 455,300 bbls/d a year ago, equating to a 104 per cent utilization rate.

The company also had record upstream production of 853,200 barrels per day (bbls/d), marking a new high for the company, in part due to record-setting bitumen production at its Firebag in-situ mining facility and the resumption of offshore production at its White Rose facility in Newfoundland and Labrador.

Capital spending was $1.09 billion, which was below analysts’ estimates for the first quarter, but in line with Suncor’s 2025 guidance that targeted a midpoint capital spending program of $6.2 billion, according to RBC Capital Markets.

Despite the upbeat tone on Wednesday’s earnings call with investors, the company acknowledged there are headwinds on the horizon, with prices currently bouncing around US$60 per barrel for benchmark West Texas Intermediate. Suncor said WTI averaged around US$71.40/bbl during the first quarter of 2025.

“I’m very pleased that the significant strides we’ve made over the last two years to improve our operational and financial performance significantly reduce our WTI break-even and strengthen our balance sheet,” chief financial officer Kris Smith said on the call.

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“(It) has significantly improved our company’s resiliency and positioned Suncor to weather these uncertain times and continue to generate solid free cash flow for our shareholders.”

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In an open letter to Prime Minister Mark Carney on May 1, Kruger was one of 38 energy company execs to call on the Liberal government to implement key regulatory changes aimed at growing production and exports of conventional energy, but he said it was a bit early to see any changes.

“There are conversations going on; I won’t get into what he said or she said,” he said. “But the alignment within the industry, the importance of the industry to the economic health and well-being of the country, I think that is understood.”

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