Page 72 - Suncor AR English

RISK FACTORS

security measures and technology to securely maintain their facilities, or could be indirectly affected by

confidential and proprietary information stored on our catastrophic events occurring at other third-party offshore
information systems. However, these measures and operations. In either case, this could give rise to liability,

technology may not adequately prevent security breaches. damage to the company’s equipment, harm to individuals,
In addition, the unavailability of the information systems or force a shutdown of our facilities or operations, or result in

the failure of these systems to perform as anticipated for a shortage of appropriate equipment or specialists required
any reason could disrupt our business and could result in to perform our planned operations.

decreased performance and increased costs, causing our In particular, East Coast Canada operations can be
business and results of operations to suffer. Any significant
impacted by winter storms, pack ice, icebergs and fog.
interruption or failure of our information systems or any During the winter storm season (October to March), the
significant breach of security could adversely affect our
company may have to reduce production rates at its
business, financial condition, results of operations and
offshore facilities as a result of limited storage capacity and
cash flow.
the inability to offload to shuttle tankers due to wave
For Suncor’s Oil Sands operations, mining oil sands ore, height restrictions. During the spring, pack ice and icebergs

extracting bitumen from mined ore, producing bitumen drifting in the area of our offshore facilities have resulted in
through in situ methods, and upgrading bitumen into SCO precautionary shut in of FPSO production and drilling
and other products involve particular risks and delays. In late spring and early summer, fog also impacts

uncertainties. Oil Sands operations are susceptible to loss our ability to transfer personnel to the offshore facilities
of production, slowdowns, shutdowns or restrictions on by helicopter.

our ability to produce higher value products, due to the Suncor’s Refining and Marketing operations are subject to
interdependence of its component systems.
all of the risks normally inherent in the operation of
For Suncor’s upstream businesses, there are risks and refineries, terminals, pipelines and other distribution

uncertainties associated with drilling for oil and natural gas, facilities and service stations, including loss of product,
the operation and development of such properties and slowdowns due to equipment failures, unavailability of

wells (including encountering unexpected formations, feedstock, price and quality of feedstock or other incidents.
pressures, ore grade qualities, or the presence of HS),
2Losses resulting from the occurrence of any of these risks
premature declines of reservoirs, sour gas releases, identified above could have a material adverse effect on
uncontrollable flows of crude oil, natural gas or well fluids,
Suncor’s business, financial condition, results of operations
other accidents, and pollution and other environmental and cash flow. Although the company maintains a risk
risks.
management program, which includes an insurance
Suncor’s Exploration and Production operations include component, such insurance may not provide adequate

drilling offshore of Newfoundland and Labrador and in the coverage in all circumstances, nor are all such risks
North Sea offshore of the U.K. and Norway, which are insurable. It is possible that our insurance coverage will not

areas subject to hurricanes and other extreme weather be sufficient to address the costs arising out of the
conditions. Drilling rigs in these regions may be exposed to allocation of liabilities and risk of loss arising from offshore

damage or total loss by these storms, some of which may operations.
not be covered by insurance. The consequence of

catastrophic events, such as blow-outs, occurring in Project Execution
offshore operations can be more difficult and There are certain risks associated with the execution of our

time-consuming to remedy. The occurrence of these events major projects and the commissioning and integration of
could result in the suspension of drilling operations, new facilities within our existing asset base, the occurrence

damage to or destruction of the equipment involved and of which could have a material adverse effect on Suncor’s
injury or death of rig personnel. Successful remediation of business, financial condition, results of operations and

these events may be adversely affected by the water cash flow.
depths, pressures and cold temperatures encountered in
Project execution risk consists of three related primary risks:
the ocean, shortages of equipment and specialists required
to work in these conditions, or the absence of appropriate • Engineering – a failure in the specification, design or
technology selection;
technology to resolve the event. Damage to the
environment, particularly through oil spillage or extensive, • Construction – a failure to build the project in the

uncontrolled fires or death, could result from these approved time and at the agreed cost; and
offshore operations. Suncor’s offshore operations could also
• Commissioning and start-up – a failure of the facility to
be affected by the actions of Suncor’s contractors and meet agreed performance targets, including operating
agents that could result in similar catastrophic events at
costs, efficiency, yield and maintenance costs.

68 SUNCOR ENERGY INC. ANNUAL REPORT 2013