Canada’s oil sands have significant expansion potential but the basin’s long-term growth outlook is dependent on the construction of a new crude export pipeline to the Pacific coast, the president of Canadian Natural Resources said on Thursday.
Scott Stauth, who heads the country’s largest oil and gas producer, made the remarks on a conference call with analysts after Canadian Natural announced it had exceeded first-quarter profit expectations, fueled in large part by higher production in its oil sands segment.
“We need that pipeline to be able to grow oil sands in a significant way,” said Stauth, referring to an Alberta government proposal for a new 1 million-barrel-per-day crude oil pipeline to British Columbia’s northwest coast.
Like other oil sands producers, Canadian Natural’s production has been growing.
Its total output increased to 1.64 million barrels of oil equivalent per day in the three months ended March 31, from 1.58 million boepd a year earlier.
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At its Jackfish thermal oil sands project, production averaged a record 134,396 barrels per day, exceeding its maximum output capacity.
The company said subsequent to the quarter, for the month of April, facilities were also running above full capacity, with output from all of its oil sands assets reaching 630,000 barrels per day.
Canadian oil producers are eager for more takeaway capacity for the country’s oil output.
A new 550,000 bpd pipeline proposal by Canadian company South Bow and its U.S. partner Bridger Pipeline aims to increase Canada’s crude exports to the U.S. by reviving parts of the old Keystone XL line.
There are also capacity-enhancing projects planned for both the Trans Mountain Pipeline and Enbridge’s Mainline.
PIPELINE PROPOSALS MULTIPLY
Stauth said Canadian Natural has long-term growth opportunities, including a 150,000 bpd expansion at its Jackpine oil sands site, which remains on hold until the company is confident it has the pipeline capacity to support them.
Long-term growth is also dependent on the outcome of ongoing talks between Canada’s federal government and Alberta, which have been trying to strike a deal on an industrial carbon-pricing policy,
Stauth said, adding that he is hopeful an agreement will be reached soon.
Canadian Prime Minister Mark Carney has previously said a new West Coast pipeline would be contingent on oil sands producers constructing a massive carbon-capture-and-storage project to bring down their greenhouse gas emissions profile.
Stauth made no mention, however, of that project or any environmental goals on Thursday. Canadian Natural reported adjusted profit of C$1.17 (US$0.8587) per share for the three months ended March 31.
Analysts on average had expected profit of C$1.01 per share.
The company’s shares were down nearly 4 per cent at C$59.82 in Toronto near midday on Thursday.
Canada doesn’t need more refineries. The world wants our oil, not our gasoline.
the “let’s just build refineries instead of new pipelines” trope is tired and has been explained to death already, but here we go again:
– refined products expire, oil doesn’t. When it takes months to transport gasoline from the refinery to markets on the other side of an ocean, those products may only have weeks of shelf life left by the time they arrive at their destinations
– every country has different standards on additive content and octane numbers. it would be cost prohibitive to build a refinery to suit all the different possible blends required for export
– there is already enough refining capacity in North America and Canada: North American refineries run at approx 81% utilization, so there is room to grow production in existing facilities that are already paid off before there is a need to spend $15+ billion on a new greenfield refinery
– oil is a global commodity priced in USD. there is no gas shortage causing price spikes in Canada. Our gas is expensive relative to the US because of government taxes, and low CAD to USD exchange rate
– Canada already exports more refined products that we import
If you need more proof, just look at the people that have been saying Canada needs more refineries in recent history: John Horgan and David Eby. If these two eco zealots really thought there was a business case for new refineries (complete with new pipelines to feed them), why would they be pushing so hard for new investment in refinery capacity in Canada? Oil companies are really good at making business decisions, if there was a market for a new refinery, we would be building them already!
You need refineries to refine and we are sorely lacking them due to the FN’s and the NIMBY crowd. The refineries we do have make it too expensive to ship the oil down through the panama canal and then up the East coast. If only we had a line to the east…..sigh!
Who is proposing to build said pipeline currently? Why are we not refining more domestically?
What is the fixation with pipelines in this country? There are over 6,000 products made from oil, and we are only interested in making one small profit on one product? Senseless!!! No wonder we quietly became a slave colony to our southern neighbors. No imagination!
Separate first , then talk resources and trade, cannot be done when we’re just a powerless Province.
Don’t hold your breath Alberta, we’ve been here before, it’s just meaningless babble from Mrs Stauth’s little boy Scottie.
I am a life long conservative voter but if Carney tells the FN’S that he is building a pipeline and does push it through, i will vote for him gladly. Someone has to rectify the damages done by DRIP.
Without sovereignty, I doubt this will ever happen.
Time for Carney to get off the environmental kick. He is holding up the works. He promised to reduce the red tape and carbon tax. Instead he is increasing it.
Smith is on the wrong track, trying to export more to the US. That is our problem at the moment. Trump is trying to tax anything not made in the US.
If Carney is not careful, Alberta will opt out of any agreements, and remove all carbon taxes, Remove the extra rights the liberals have given to the natives, and go to Smith’s plan B. – Nobody in Canada wants that.