Page 71 - Suncor AR English

10. RISK FACTORS

Suncor is committed to a proactive program of enterprise in commodity prices in the near term. A prolonged period
risk management intended to enable decision-making of low prices could affect the value of our upstream and

through consistent identification of risks inherent to its downstream assets and the level of spending on growth
assets, activities and operations. Some of these risks are projects, and could result in the curtailment of production

common to operations in the oil and gas industry as a from some properties and/or the impairment of that
whole, while some are unique to Suncor. The company’s property’s carrying value. Accordingly, low commodity

enterprise risk committee (ERC), comprised of senior prices, particularly for crude oil, could have a material
representatives from business and functional groups across adverse effect on Suncor’s business, financial condition,

Suncor, oversees entity-wide processes to identify, assess results of operations and cash flow, and may also lead to
and report on the company’s principal risks. A principal risk impairments or write-offs of the values of Suncor’s assets

is an exposure that has the potential to materially impact or projects in development.
the ability of one of our businesses or functions to meet or

support a Suncor objective. The realization of any of the Operational Outages and Major Environmental or
following principle risk factors could have a material Safety Incidents

adverse effect on our business, financial condition, results Each of Suncor’s primary operating businesses – Oil Sands,
of operations and cash flow:
Exploration and Production, and Refining and Marketing –

demand significant levels of investment in the design,
Volatility of Commodity Prices
operation and maintenance of facilities, and, therefore,

Our financial performance is closely linked to prices for carry the additional economic risk associated with
crude oil in our upstream business and prices for refined operating reliably or enduring a protracted operational

petroleum products in our downstream business, and, to a outage. These businesses also carry the risks associated
lesser extent, to natural gas prices in our upstream with environmental and safety performance, which is

business, where natural gas is both an input and output of closely scrutinized by governments, the public and the
production processes. The prices for all of these media, and could result in a suspension of or inability to

commodities can be influenced by global and regional obtain regulatory approvals and permits, or, in the case of
supply and demand factors, which are factors that are a major environmental or safety incident, civil suits or

beyond our control and can result in a high degree of price charges against the company.
volatility
Generally, Suncor’s operations are subject to operational
Crude oil prices are also affected by, among other things, hazards and risks such as fires, explosions, blow-outs,
global economic health and global economic growth power outages, severe winter climate conditions and the

(particularly in emerging markets), pipeline constraints, migration of harmful substances such as oil spills, gaseous
regional and international supply and demand imbalances, leaks or a release of tailings into water systems, any of

political developments, compliance or non-compliance with which can interrupt operations or cause personal injury or
quotas imposed on Organization of Petroleum Exporting death, or damage to property, equipment, the

Countries (OPEC) members, access to markets for crude oil environment, and information technology systems and
and weather. These factors impact the various types of related data and control systems.

crude oil and refined products differently and can impact The reliable operation of production and processing
differentials between light and heavy grades of crude oil
facilities at planned levels and Suncor’s ability to produce
(including blended bitumen), and between conventional higher value products can also be impacted by failure to
and synthetic crude oil.
follow operating procedures or operate within established
Refined petroleum product prices and refining margins are operating parameters, equipment failure through

also affected by, among other things, crude oil prices, the inadequate maintenance, unanticipated erosion or
availability of crude oil and other feedstock, levels of corrosion of facilities, manufacturing and engineering

refined product inventories, regional refinery availability, flaws, and labour shortage or interruption. The company is
marketplace competitiveness, and other local market also subject to operational risks such as sabotage,

factors. Natural gas prices in North America are affected terrorism, trespass, theft and malicious software or network
primarily by supply and demand, and by prices for attacks.

alternative energy sources.
The efficient operation of Suncor’s business is dependent

Commodity prices and refining margins have fluctuated on computer hardware and software systems. Information
widely in recent years. Given the recent global economic systems are vulnerable to security breaches by computer

uncertainty, we expect continued volatility and uncertainty
hackers and cyberterrorists. We rely on industry-accepted

SUNCOR ENERGY INC. ANNUAL REPORT 2013 67