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Operational problems hit Canada's Suncor again, lowering oil production

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FILE PHOTO: Suncor Energy facility is seen in Sherwood Park, Alberta
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By Rod Nickel

WINNIPEG, Manitoba (Reuters) -Operational problems at two Suncor Energy Canadian oil sands sites last month resulted in lower crude production, the company said on Tuesday, marking its latest such issue.

Suncor also confirmed the death of a worker on Jan. 6 at its Base plant, which police had reported earlier. Suncor said a heavy haul truck rear-ended a second truck at the mine, resulting in the death of a driver.

The incident is the fourth fatality at a Suncor facility since late 2020, Scotiabank analyst Jason Bouvier said.

The incidents at Syncrude and Firebag cut oil production by 195,000 barrels per day (bpd) in the second half of December, Suncor said. The company said its full-year production was 732,000 bpd, down 1% from its guidance range.

The sites have returned to normal output. Production guidance for 2022 is unaffected.

Operational problems were a recurring issue at Suncor last year. It discovered in July that it needed to change the slope of the south face of its Fort Hills mine, resulting in a delayed ramp-up of production and added costs.

"Operational issues seem to be ongoing, leaving us unenthused about how quickly production can be restored at major facilities," National Bank of Canada analyst Travis Wood said in a research note. Wood added that major changes are needed to the company's operational and safety culture.

Suncor shares in Toronto rose more than 1% in early trading.

The problem at Syncrude, in which Imperial Oil holds a minority interest, was related to failures in chains that drive crushing equipment. Extreme cold weather delayed completion of repairs.

At Firebag, frozen parts led to two plants going offline and 170 wells shutting down.

(Reporting by Rod Nickel in Winnipeg; Editing by Barbara Lewis and Andrea Ricci)

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