Page 68 - AIF - English

RISK FACTORS

Suncor is committed to a proactive program of enterprise projects, and could result in the curtailment of production
risk management intended to enable decision-making from some properties and/or the impairment of that

through consistent identification of risks inherent to its property’s carrying value. Accordingly, low commodity
assets, activities and operations. Some of these risks are prices, particularly for crude oil, could have a material

common to operations in the oil and gas industry as a adverse effect on Suncor’s business, financial condition,
whole, while some are unique to Suncor. The company’s results of operations and cash flow, and may also lead to

enterprise risk committee (ERC), comprised of senior impairments or writeoffs of the values of Suncor’s assets or
representatives from business and functional groups across projects in development.

Suncor, oversees entity-wide processes to identify, assess
and report on the company’s principal risks. A principal risk Operational Outages and Major Environmental or

is an exposure that has the potential to materially impact Safety Incidents
the ability of one of our businesses or functions to meet or Each of Suncor’s primary operating businesses – Oil Sands,

support a Suncor objective. The realization of any of the Exploration and Production, and Refining and Marketing –
following risks, including Suncor’s principle risk factors demand significant levels of investment in the design,

could have a material adverse effect on our business, operation and maintenance of facilities, and, therefore,
financial condition, results of operations and cash flow:
carry the additional economic risk associated with

operating reliably or enduring a protracted operational
Volatility of Commodity Prices
outage. These businesses also carry the risks associated

Our financial performance is closely linked to prices for with environmental and safety performance, which is
crude oil in our upstream business and prices for refined closely scrutinized by governments, the public and the

petroleum products in our downstream business, and, to a media, and could result in a suspension of or inability to
lesser extent, to natural gas prices in our upstream obtain regulatory approvals and permits, or, in the case of

business, where natural gas is both an input and output of a major environmental or safety incident, civil suits or
production processes. The prices for all of these charges against the company.
commodities can be influenced by global and regional
Generally, Suncor’s operations are subject to operational
supply and demand factors, which are factors that are hazards and risks such as fires, explosions, blow-outs,
beyond our control and can result in a high degree of price
power outages, severe winter climate conditions and the
volatility.
migration of harmful substances such as oil spills, gaseous

Crude oil prices are also affected by, among other things, leaks or a release of tailings into water systems, any of
global economic health and global economic growth which can interrupt operations or cause personal injury or

(particularly in emerging markets), pipeline constraints, death, or damage to property, equipment, the
regional and international supply and demand imbalances, environment, and information technology systems and

political developments, compliance or non-compliance with related data and control systems.
quotas imposed on OPEC members, access to markets for
The reliable operation of production and processing
crude oil, and weather. These factors impact the various facilities at planned levels and Suncor’s ability to produce
types of crude oil and refined products differently and can
higher value products can also be impacted by failure to
impact differentials between light and heavy grades of follow operating procedures or operate within established
crude oil (including blended bitumen), and between
operating parameters, equipment failure through
conventional and synthetic crude oil.
inadequate maintenance, unanticipated erosion or

Refined petroleum products prices and refining margins are corrosion of facilities, manufacturing and engineering
also affected by, among other things, crude oil prices, the flaws, and labour shortage or interruption. The company is
availability of crude oil and other feedstock, levels of also subject to operational risks such as sabotage,

refined product inventories, regional refinery availability, terrorism, trespass, theft and malicious software or network
marketplace competitiveness, and other local market attacks.

factors.
The efficient operation of Suncor’s business is dependent

Natural gas prices in North America are affected primarily on computer hardware and software systems. Information
by supply and demand, and by prices for alternative energy systems are vulnerable to security breaches by computer

sources.
hackers and cyberterrorists. We rely on industry-accepted
security measures and technology to securely maintain
Commodity prices and refining margins have fluctuated
widely in recent years. Given the recent global economic confidential and proprietary information stored on our
information systems. However, these measures and
uncertainty, we expect continued volatility and uncertainty
in commodity prices in the near term. A prolonged period technology may not adequately prevent security breaches.
In addition, the unavailability of the information systems or
of low prices could affect the value of our upstream and
downstream assets and the level of spending on growth
the failure of these systems to perform as anticipated for

66 SUNCOR ENERGY INC. ANNUAL INFORMATION FORM 2014