Page 70 - AIF - English

RISK FACTORS

estimates, and these differences can be material. Project Cost Management

execution can also be impacted by:
Production from oil sands through mining, upgrading and
in situ recovery is, relative to most major conventional
• Failure to comply with Suncor’s project implementation
model;
hydrocarbon reserves, a higher cost resource to develop
and produce. Suncor is exposed to the risk of escalating
• The availability, scheduling and cost of materials,
equipment and qualified personnel;
operating costs in both its oil sands business and other
businesses, which could reduce profitability and cash flow,
• The complexities associated with integrating and
and materially adversely affect Suncor’s business, financial
managing contractor staff and suppliers in a confined condition and results of operations, and may reduce cash
construction area;
flow available for growth or dividends and major project
• Our ability to obtain the necessary environmental and capital costs. This may constrain Suncor’s ability to execute

other regulatory approvals;
high-quality projects that deliver lower operating costs.
• The impact of general economic, business and market Factors contributing to these risks include, but are not

conditions;
limited to, the skills and resource shortage, the long-term
success of existing and new in situ technologies, and the
• The impact of weather conditions;
geology and reserves characterization of in situ reserves

• Our ability to finance growth if commodity prices were that can lead to higher SORs and lower production.
to decline and stay at low levels for an extended

period;
Government Policy
Suncor operates under federal, provincial, state and
• Risks relating to restarting projects placed in safe mode,
including increased capital costs;
municipal legislation in numerous countries. The company
is also subject to regulation and intervention by
• The effect of changing government regulation and
public expectations in relation to the impact of oil governments in oil and gas industry matters, such as land
tenure, royalties, taxes (including income taxes),
sands development on the environment; and
government fees, production rates, environmental
• Risk associated with offshore fabrication and logistics.
protection controls, safety performance, the reduction of

In addition, there are certain risks associated with the GHG and other emissions, the export of crude oil, natural
execution of our exploration, production and refining gas and other products, the company’s interactions with

projects. These risks include, but are not limited to:
foreign governments, the awarding or acquisition of
• Our ability to obtain the necessary environmental and exploration and production rights, oil sands leases or other

regulatory approvals;
interests, the imposition of specific drilling obligations,
control over the development and abandonment of fields
• Risks relating to scheduling, resources and costs,
including the availability and cost of materials, and mine sites (including restrictions on production) and
possibly expropriation or cancellation of contract rights.
equipment and qualified personnel;
Changes in government policy or regulation, or
• The impact of general economic, business and market
conditions;
interpretation thereof, have a direct impact on Suncor’s
business, financial condition, results of operations and cash
• The impact of weather conditions;
flow, as evidenced by such initiatives as the Alberta

• The accuracy of project cost estimates;
government’s royalty review program in 2007, and, more
recently, by trade sanctions in Libya (which have since been
• Our ability to finance growth;
lifted) and Syria imposed by Canadian and other
• Our ability to source or complete strategic transactions;
international governments, and increased production taxes

• The effect of changing government regulation and in the U.K. Changes in government policy or regulation can
public expectations in relation to the impact of oil also have an indirect impact on Suncor, including

sands development on the environment; and
opposition to new North American pipeline systems, such
• The commissioning and integration of new facilities as the Keystone XL or the Northern Gateway proposals, or,

within our existing asset base could cause delays in incrementally over time, through increasingly stringent
achieving guidance, targets and objectives.
environmental regulations or unfavourable income tax and

The failure to sanction or build a project could result in royalty regimes. The result of such changes can also lead to
additional compliance costs and staffing and resource
additional costs, including abandonment and reclamation
costs, to shut down the project, and such costs could be levels, and also increase exposure to other principal risks of
Suncor, including environmental or safety non-compliance
material to Suncor.
and permit approvals.

68 SUNCOR ENERGY INC. ANNUAL INFORMATION FORM 2014