https://www.miningweekly.com

Oil sands giants restrain spending as pipeline pinch persists

3rd December 2019

By: Bloomberg

  

Font size: - +

Capital spending in Canada’s oil-sands reserves look set to continue to dwindle as pipeline bottlenecks persist and the Alberta government’s production limits remain in place.

Husky Energy said early Monday that it’s cutting capital spending for 2020 and 2021 by a total of C$500-million, and Suncor Energy said later in the day that it’s keeping spending on oil-related projects flat.

While other major producers have yet to release spending plans for next year, the projections from Husky and Suncor show energy companies may continue to focus on wringing more profit from their existing output, rather than plowing money into churning out more barrels. After a year in which Canadian oil companies’ output was cut by mandatory production limits, Suncor is projecting a 5% production increase for next year, while Husky sees a 4% boost.

“Looking forward, we will continue to focus on value over volume,” Suncor CEO Mark Little said in a statement. Suncor’s overall capital budget is increasing next year, but the added spending is being directed toward initiatives that will increase the company’s free funds flow, such as a cogeneration facility, digital technology initiatives and a bi-directional pipeline.

The oil sands, which contain the world’s third-largest reserves of crude, have struggled to recover from the 2014 to 2016 downturn and a shortage of pipeline space that has weighed on prices and restrained production growth. Capital spending in the oil sands already was set to decline for the fifth straight year, to C$12-billion this year from C$33.9-billion in 2014, according to the Canadian Association of Petroleum Producers.

Edited by Bloomberg

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION