Rocky Mountain Crude
Differentials
A Suncor Perspective
Tim Kirwin
Crude Trader
April 2006
OPTIONAL TEXT
Rocky Mountain Crude Differentials

Executive Summary
 Rockies production increased versus anticipated decline
 Canadian crude production increasing, however Padd 4
refiners have not increased Canadian crude percentage
 Infrastructure is inadequate to handle supply/demand
disruptions
 Quality of common stream Guernsey is heavier than historical
 Heavy industry wide turnaround maintenance
 Unplanned refinery maintenance
 Signs of over supply already taking place prior to refinery
outages
Rocky
OPTIONAL TEXT Mountain Fundamentals

Demand
 Unplanned outages in December 2005 lowered
demand for local and Canadian crudes.
 Demand has been further reduced by industry wide
refinery maintenance (including Suncor) mandated by
the EPA to produce ultra clean fuels.
Suncor was not a sweet buyer February/March
The east plant continued to run at full capacity
Both plants expected back to full capacity in April
(Suncor running at 85% as of April 25th)
OPTIONAL TEXT
Rocky Mountain Crude Differentials

Refinery Supply
 Refineries are all different in what kinds and how much of
any one crude they can run
 Refineries rarely able to process 100% of any crude type
 To fill up all refinery units and run at full capacity
refineries make decisions based on
 Price
 Yield
 Availability
 LP determines optimum crude slate
OPTIONAL TEXT
OSA
Sweet Crude
20% Naphtha
12% LSR
40% Distillate
5% LSR
9% Naphtha
19% Naphtha
12% Kerosene
13% Kerosene
12% Diesel
13% Diesel
40% Gas Oil
Sour Crude
31% Gas Oil
35% Gas Oil
31% Asphalt
8% Sweet Resid
OPTIONAL TEXT
PAWS
Wyomi ng Swt vs WTI Platt's 1st Month
Max. -0.650
Min. -25.750
19APR06
Mean -4.072 Std.Dev.5.333 Last-16.250
0
0
-5
U
S
$
/
B
b
l
-5
-10
-10
-15
-15
-20
-20
-25
-25
-30
-30
2003
Sunoco Inc.
2004
2005
2006
2JAN03 to 18APR06
Differential widened in 2005, major move due to Suncor
fire maintenance
OPTIONAL TEXT
PAWS
Wyomi ng Swt Platt's Mth1(Adj )
Max. 64.455
U
S
$
/
B
b
l
Mi n. 23.950
19APR06
Mean 40.837 Std.Dev.10.252 Last54.995
70
70
60
60
50
50
40
40
30
30
20
20
2003
Sunoco Inc.
2004
2005
2006
2JAN03 to 18APR06
Strong outright WTI prices have off-set wide differentials
Suncor Energy – overview
OPTIONAL TEXT

Suncor is a major purchaser of Rockies crude:



Suncor focuses on fair pricing to foster strong long-term
relationships with crude suppliers
Suncor’s oil sands production is increasing, but that
production and the infrastructure to take it to market are
planned years in advance.


We have increased domestic crude runs since purchasing the refineries
In 2005 less than 8% of Suncor crude came from Oil Sands
Suncor has invested over $400 million in refinery
upgrades.



reliable demand for Rockies crude
local refining means lower fuel prices
increased employment, economic benefits, taxes/royalties
OPTIONAL TEXT has increased Rockies crude purchases
Suncor
Domestic Crude Runs at Suncor Refinery
66000
Barrels Per Day
64000
62000
60000
58000
56000
54000
52000
50000
2001
2002
2003
2004
2005