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10. ASSET IMPAIRMENT

All impairments and impairment reversals were recorded as part of Depreciation, Depletion, Amortization and Impairment
expense. Asset impairments during the period are as follows.

Exploration and Production

Libya

Political unrest in Libya resulted in the closure of export terminal operations at certain Libyan seaports in late July 2013
and production was essentially shut-in for the last five months of 2013. As a result, the company performed an

impairment test on its Libyan assets using a value-in-use methodology to determine the recoverable amount, and an
after-tax impairment charge of $101 million was recognized in the fourth quarter of 2013 and charged against Property,

Plant and Equipment.

The impairment test used an expected cash flow approach based on 2013 year-end reserves data with a risk-adjusted
discount rate of 17% to reflect uncertainty related to continued political unrest in the region, with three scenarios

representing i) future cash flows based on the 2013 year-end reserves information, ii) future operations incorporating the
company’s strategic growth plan, and iii) suspension of all activity at the end of 2014. The first two scenarios were equally

weighted at 45% each and the final scenario was assigned a weighting of 10% based on the company’s best estimates.
All scenarios incorporated the restart of production on April 1, 2014 and were based on an average price of US$104.00

per barrel through 2014 – 2019 escalated at an average of 2% per year thereafter.

The calculation of the recoverable amount is sensitive to the likelihood and timing of production restart, the discount rate,
and prices. A three-month delay in the resumption of production restart would impact after-tax earnings by approximately

$50 million. A 2% change in discount rate would impact after-tax earnings by approximately $80 million. A 5% change
in price would impact after-tax earnings by approximately $75 million.

The remaining carrying value of the company’s net assets in Libya as at December 31, 2013 was approximately

$570 million.

Syria
Since December 2011, the company’s operations and its contractual obligations in Syria have been suspended under a

period of force majeure due to political unrest and international sanctions affecting that country. As there has been no
resolution of the political situation and increasing uncertainty with respect to the company’s return to operations in the

country, during the fourth quarter of 2013, using a value-in-use methodology, the company impaired the remaining
carrying value of its Syrian property, plant and equipment and working capital, resulting in an after-tax impairment charge
of $422 million. The company also recognized $300 million ($223 million after-tax) of risk mitigation proceeds in Other

Income that had been received in the fourth quarter of 2012 as the likelihood of return in the foreseeable future is
remote. These proceeds are subject to a provisional repayment should the company recover any or all of its investment

in Syria.

In the second quarter of 2012, the company recognized after-tax impairment charges and a bad debt provision of
$694 million related to its Syrian assets. An impairment test was performed since there was no resolution to the political

situation and international sanctions continued to affect the country. The impairment losses were charged against
Property, Plant and Equipment ($604 million) and other current assets ($23 million). The company also recognized a bad

debt provision for the remainder of its Syrian receivables ($67 million).

In the fourth quarter of 2012, a valuation assessment was performed. After receipt of the $300 million of risk mitigation
proceeds, an impairment reversal of $177 million was recorded.

Other

In the fourth quarter of 2013, the company recognized an after-tax impairment charge of $40 million to reflect the
recoverable amount of its unconventional oil properties in the Wilson Creek area of central Alberta. The recoverable

amount was determined using a fair value less costs of disposal methodology, with the expected cash flow approach
based on 2013 year-end reserves information and a risk-adjusted discount rate of 10% (Level 3 fair value inputs).

In the fourth quarter of 2012, the company recognized an after-tax impairment charge of $65 million related primarily to

certain East Coast Canada exploration and evaluation assets as well as natural gas Arctic land leases as a result of future

SUNCOR ENERGY INC. ANNUAL REPORT 2013 105