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Suncor Seeks The Balance Between Climate And Oil

The Canadian company invests in carbon sequestration to meet emissions targets, and it does so with record profits that are bought cheaper than other major global competitors. On the stock market, it could still rise 25%. | All about the fund advised by the Economist, Tressis Cartera Eco30 .

Alice Munro, winner of the 2013 Nobel Prize in Literature, once said that she writes about small towns because they are “like a stage for human lives. ” Last year, the author of The Lives of Women sent a letter of protest to Prime Minister Trudeau , along with other Nobel laureates, asking him to deny permission to operate a tar sands mine in Alberta by the Teck Resources company , and any expansion of the fossil fuel sector.

Although the company eventually pulled out of its project, the protests highlighted Canada’s difficult balance between meeting climate commitments and harnessing the wealth of oil.

Mark Little, CEO of Suncor , Canada’s largest integrated oil company, believes that carbon capture, storage and use (CCUS) technology “is the ticket to reducing emissions that will allow Canada to achieve their ambition to reach a net zero [emissions] level by 2050, “as reported in May by the Canadian newspaper Financial Post .

In addition, this medium reported that, together with other investors, Suncor had invested in Svante , a company specializing in carbon capture and that it claims to be capable of sequestering emissions in a year that is equivalent to taking 200,000 cars off the road. Even so, this method also has its detractors in the fight against global warming.

Suncor, which is part of the Tressis Cartera Eco30 fund , advised by elEconomista , will earn 8,882 million euros this year, according to the consensus of analysts collected by FactSet, exceeding the 2019 EBITDA, which was the best in the history of the company. Between 2021 and 2023, the company’s gross profit will grow by 8%, to exceed 9,600 million.

One of the attractions of Suncor from an investment point of view is that its 2022 earnings are listed on the stock market at 7.9 times current prices, one of the lowest figures among its peers (13.6 times that of Chevron ; 11.2 times from Equinor ; 10.5 times from Eni; 8.6 times from TotalEnergies), although it is true that the Russian companies Gazprom and Rosneft are bought cheaper.

Within its future plans, the company repaid 1,200 million Canadian dollars of debt
Thanks to the reconstruction of the price of crude, Suncor shares have appreciated 35% so far this year and are trading in the area of ​​C $ 28.8 (at 7.5% of its annual maximum, but to 46% of the immediate pre-pandemic maximum).

As part of its future plans, the company repaid C $ 1.2 billion of long-term debt in the first half of the year, while repurchasing nearly C $ 1 billion in shares, Bloomberg reports .

Mark Little has come up with new uses for his oil sands . ” Bitumen is rich in asphaltenes , the raw material for carbon fiber, used to produce lighter vehicles, including electric ones,” he told the Financial Post . Producing it on scale, he says, could quadruple Alberta’s income.