Page 124 - Suncor AR English
P. 124
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24. PROVISIONS
Decommissioning
(1)
(2) (3)
($ millions)
and RestorationRoyaltiesOtherTotal
(restated – (restated –
note 6)
note 6)
3 801
4 562
At January 1, 2012
355 406
.......................................................................................................................................................................................................................................................
Liabilities incurred 378 317 408 1 103
.......................................................................................................................................................................................................................................................
Changes in estimates 783 51 (14) 820
.......................................................................................................................................................................................................................................................
Liabilities settled (433) (356) (73) (862)
.......................................................................................................................................................................................................................................................
Accretion 163 — 6 169
.......................................................................................................................................................................................................................................................
Foreign exchange (4) — — (4)
At December 31, 2012 4 688 367 733 5 788
.......................................................................................................................................................................................................................................................
Less: current portion (395) (367) (94) (856)
4 293
— 639
4 932
At December 31, 2012 4 688
5 788
367 733
.......................................................................................................................................................................................................................................................
Liabilities incurred 398 224 97 719
.......................................................................................................................................................................................................................................................
Changes in estimates 82 (15) (392) (325)
.......................................................................................................................................................................................................................................................
Liabilities settled (423) (52) (132) (607)
.......................................................................................................................................................................................................................................................
Accretion 174 — 5 179
.......................................................................................................................................................................................................................................................
Asset divestitures (714) — — (714)
.......................................................................................................................................................................................................................................................
Foreign exchange 33 — 3 36
At December 31, 2013 4 238 524 314 5 076
.......................................................................................................................................................................................................................................................
Less: current portion (362) (524) (112) (998)
3 876 — 202 4 078
(1) Represents decommissioning and restoration provisions associated with the retirement of Property, Plant and Equipment and Exploration and Evaluation
assets. The total undiscounted amount of estimated future cash flows required to settle the obligations at December 31, 2013 was approximately
$8.0 billion (December 31, 2012 – $8.1 billion). A weighted average credit-adjusted risk-free interest rate of 4.51% was used to discount the provision
recognized at December 31, 2013 (December 31, 2012 – 3.75%). The credit-adjusted risk-free rate used reflects the expected time frame of the
provisions. Payments to settle the decommissioning and restoration provisions occur on an ongoing basis and will continue over the lives of the
operating assets, which can exceed fifty years.
(2) In December 2013, Suncor reached an agreement with the Government of Alberta concerning several outstanding issues under the Royalty Amending
Agreements (RAA) entered into in 2008. Subsequent to December 31, 2013, the company settled $196 million related to these provisions.
(3) For the year ended December 31, 2013, the company’s provisions decreased by $300 million as a result of a recognition of risk mitigation proceeds to
earnings. In addition, the company divested one of its pipeline commitments to a third party, resulting in a $76 million decrease to provisions.
120 SUNCOR ENERGY INC. ANNUAL REPORT 2013
