Page 73 - AIF - English

these two sets of objectives is critically important to Suncor in North America have highlighted the nature of this risk

to deliver value to shareholders and stakeholders. These generally; a disruption in service by one of these third
objectives also demand a large number of improvement parties can also have a dramatic impact on Suncor’s

initiatives that compete for resources, and may negatively operations. Pipeline constraints that affect takeaway
impact the company should there be inadequate capacity or supply of inputs could impact our ability to

consideration of the cumulative impacts of prior and produce at capacity levels. Disruptions in pipeline service
parallel initiatives on people, processes and systems. There could adversely affect commodity prices, Suncor’s price

is a risk that these objectives may exceed Suncor’s capacity realizations, refining operations and sales volumes, or limit
to adopt and implement change.
our ability to deliver production. These interruptions may

be caused by the inability of the pipeline to operate or by
Market Access
the oversupply of feedstock into the system that exceeds
Suncor anticipates higher production of bitumen in future
pipeline capacity. There can be no certainty that short-term
years, due mainly to production growth from operational constraints on pipeline systems arising from
debottlenecking at both MacKay River and Firebag
pipeline interruption and/or increased supply of crude oil
operations as well as MacKay River Stage 2. Due to its high will not occur. In addition, planned or unplanned
viscosity, bitumen is blended with a light diluent or SCO shutdowns or closures of our refinery customers may limit

and sold as a heavy crude oil. The markets for heavy crude our availability to deliver feedstock. All of these events
are more limited than those for light crude, making them could have negative implications on Suncor’s business,

more susceptible to supply and demand changes and financial condition, results of operations and cash flow.
imbalances (whether as a result of pipeline constraints or

otherwise). Heavy crude oil generally receives lower market Foreign Operations
prices than light crude, due principally to the lower quality The company has operations in a number of countries with

and value of the refined product yield, and the higher cost different political, economic and social systems. As a result,
to transport the more viscous product on pipelines, and the company’s operations and related assets are subject to

this price differential can be amplified due to supply and a number of risks and other uncertainties arising from
demand imbalances, as has been experienced in recent foreign government sovereignty over the company’s

years with pipeline constraints and the inability to international operations, which may include, among
efficiently bring products to market. The price differential other things:

between light crude and WCS is particularly important for • Currency restrictions and exchange rate fluctuations;
Suncor. The market price for WCS is influenced by regional
• Loss of revenue, property and equipment as a result of
supply and demand factors, including the availability and expropriation, nationalization, war, insurrection and
price of diluent, and by the availability and cost of
geopolitical and other political risks;
accessing primary markets through pipeline systems.
• Increases in taxes and government royalties;
Constrained market access for oil sands production due to
insufficient pipeline takeaway capacity, growing inland • Compliance with existing and emerging anti-corruption
laws, including the Foreign Corrupt Practices Act
production and refinery outages create risk of widening
differentials or shut-in of production that could have a (United States), the Corruption of Foreign Officials Act
material adverse effect on our business, financial condition, (Canada) and the United Kingdom Bribery Act;

results of operations and cash flow. In addition, oil and • Renegotiation of contracts with government entities
natural gas producers in North America, and particularly in
and quasi-government agencies, including risks around
Canada, currently receive discounted prices for their ongoing negotiations in Libya with the NOC related to
production relative to certain international prices, due to the periods in which Suncor was in force majeure

constraints on the ability to transport and sell such under its EPSAs;
products to international markets. A failure to resolve such
• Changes in laws and policies governing operations of
constraints may result in continued discounted or reduced foreign-based companies; and
commodity prices realized by oil and natural gas producers
• Economic and legal sanctions (such as restrictions
such as Suncor.
against countries experiencing political violence, or
countries that other governments may deem to sponsor
Third-Party Service Providers
Suncor is reliant on the operational integrity of a large terrorism).

number of third-party service providers, including input and If a dispute arises in the company’s foreign operations, the
output commodity transport (pipelines, rail, trucking, company may be subject to the exclusive jurisdiction of

marine) and utilities associated with various Suncor foreign courts or may not be able to subject foreign
facilities. Recent incidents around commodity transportation
persons to the jurisdiction of a court in Canada or the

SUNCOR ENERGY INC. ANNUAL INFORMATION FORM 2014 71