Cenovus Vitality Inc. is the most recent Canadian oilsands firm to report surging manufacturing ranges simply in time for the anticipated startup of the Trans Mountain pipeline enlargement.
The Calgary-based firm stated Thursday it noticed its second-highest quarterly manufacturing ever within the fourth quarter of 2023, with output of 808,600 barrels of oil equal per day.
That compares with 806,900 boe/d in the identical interval of final yr and represents a rise of roughly 12,000 barrels per day from the third quarter of 2023.
The uptick in output was largely resulting from sturdy efficiency from Cenovus’ oilsands property, specifically its Foster Creek website in northern Alberta the place new effectively pads added about 10,000 barrels per day of manufacturing relative the third quarter.
Cenovus can also be bringing new effectively pads on at its Christina Lake oilsands website and anticipates continued manufacturing progress at its Dawn oilsands facility because it brings on new effectively packages over the following two to a few years.
In a convention name with analysts, CEO Jon McKenzie stated investments in oilsands progress tasks are starting to bear fruit.
Whereas deliberate upkeep and turnaround tasks will mood oilsands output over the summer season, he stated 2024 ought to exceed 2023 when it comes to whole manufacturing.
“December was in all probability the second-highest manufacturing month that we’ve ever had as an organization,” McKenzie stated.
“We count on This autumn to be even larger subsequent yr than it was this yr, significantly as we carry on extra effectively pads proper throughout the enterprise.”
For the complete yr 2023, Cenovus’ crude oil manufacturing from the oilsands averaged 593,400 barrels per day, together with 186,300 barrels per day at Foster Creek and 237,400 barrels per day at Christina Lake.
The corporate’s 2024 steerage requires oilsands manufacturing to be within the vary of 590,000 to 610,000 barrels per day.
Further manufacturing progress is anticipated in 2025 and 2026 resulting from ongoing optimization work at each Foster Creek and Christina Lake.
Cenovus’ larger manufacturing in its most up-to-date quarter was offset by decrease commodity costs, in order that the corporate’s fourth-quarter earnings fell to $743 million from $784 million a yr earlier.
Income for the quarter additionally declined to $13.13 billion, down from $14.06 billion within the fourth quarter of 2022.
However the firm’s near-record-setting output is a part of an total trade development as Canadian oilsands producers ramp up output in preparation for the Trans Mountain pipeline enlargement, which is within the closing phases of building and can present the trade with a long-awaited extra 590,000 barrels per day of export capability to the West Coast.
The extra pipeline capability not solely offers Canadian oil corporations the power to develop their manufacturing, additionally it is anticipated to cut back the worth low cost Canadian producers sometimes tackle their oil partially resulting from an absence of export capability.
Cenovus is a serious contracted shipper on Trans Mountain, and McKenzie stated the corporate continues to count on the startup of the enlargement to happen by the center of this yr — regardless of the most recent spherical of construction-related difficulties which have plagued the undertaking.
Earlier this month, Imperial Oil Ltd. additionally introduced its oilsands manufacturing surged within the fourth quarter, with its Kearl oilsands facility reaching all-time report output within the closing three months of 2023.
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