UPDATE 2-Suncor Energy expects higher production, capex in 2024

(Adds details on Fort Hills asset and outlook in paragraphs 4-7)

Dec 5 (Reuters) - Suncor Energy on Tuesday forecast higher production for 2024 compared with 2023, as the Canadian energy company bets on strong performance from its Fort Hills asset.

The company also said its 2024 capital expenditure is expected to be between C$6.3 billion ($4.64 billion) and C$6.5 billion, higher than its current-year forecast of C$5.4 billion-C$5.8 billion.

The Calgary, Alberta-based company expects upstream production to be between 770,000 and 810,000 barrels per day (bpd) next year, 7% higher compared with its 2023 production estimate.

Fort Hills, an open-pit mine, has

struggled

with operational challenges since starting production in early 2018.

Last year, Suncor forecast 5%

lower

gross production and higher operating costs per barrel at Fort Hills over the next three years as a result of long-term improvement plans for the project.

Suncor added on Tuesday that its Fort Hills three-year improvement plan was on target, "with opportunities to further increase value".

Fort Hills' cash operating costs for the next year is expected to be between C$33 per barrel and C$36 per barrel, the company said.

Global oil prices have scaled back compared to last year but still remain at a level when companies can drill profitably.

"Suncor's 2024 guidance reflects our priority to deliver improved shareholder returns through focused cost reductions, increased upstream production and a disciplined capital investment program, all targeted at improving the company's free funds flow per share," CEO Rich Kruger said in a statement.

The company also expects refining utilization of 92% to 96% in 2024, and throughput between 430,000 bpd and 445,000 bpd.

($1 = 1.3587 Canadian dollars) (Reporting by Sourasis Bose and Arunima Kumar in Bengaluru; Editing by Maju Samuel)