Page 12 - NorthAmOil Week 12

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PROJECTS & COMPANIES NorthAmOil
Suncor, CNRL take steps to adapt to lower price environment
tion ventures could suffer as Canadian oil pro- its reduction
ducers pursue aggressive cost-cutting and focus on the most profitable projects in the current price environment.
in spending reduction, there was no change
Suncor noted, however, that it would still go
ahead with construction of connecting pipelines
between its base plant and nearby Syncrude
oil sands operations, as well as completing the to its 2020 deployment of driverless haul trucks at its Fort
Hills oil sands mine.
“Our business model and financial strategy
are designed to withstand volatile environ- ments,” Suncor’s CEO, Mark Little, stated.
Meanwhile, Husky Energy has announced that it is suspending major construction work on the West White Rose Project offshore New- foundland, citing concerns over the impact of coronavirus (COVID-19). Suncor has a 26% stake in West White Rose.™
production guidance volumes.
Suncor is still completing the deployment of driverless haul trucks at its Fort Hills oil sands mine.
CANADA
SUNCOR Energy and Canadian Natural Resources Ltd (CNRL) have both announced steps in recent days that they are taking to adjust to the collapse in oil prices. Their moves come amid warnings over how painful lower prices will be for Canada’s energy industry, given that the country’s heavy crude already trades at a dis- count to US benchmarks.
CNRL – Canada’s largest oil and gas producer by volume – said on March 18 that it was cut- ting spending for this year from CAD4.05bn ($2.85bn) to CAD2.96bn ($2.08bn). The com- pany is also asking its management and employ- ees to take a pay cut. This includes a 20% pay cut for CNRL’s president, Tim McKay, as well as cuts of 15% for other members of the management team and 12% for all vice-presidents.
The Financial Post reported that the company had also implemented a hiring freeze, and was asking its suppliers to cut fees.
CNRL noted that despite its reduction in spending reduction, there was no change to its 2020 production guidance volumes of 1.14- 1.21mn barrels of oil equivalent per day (boepd), as set out in December.
“Canadian Natural’s asset base has low sus- taining capital and low reservoir risk, which allows it to effectively manage through com- modity price cycles, with little impact on our near-term production levels and net asset value, thereby preserving long-term value for our shareholders and creditors,” the company stated.
Suncor, for its part, said on March 23 that it
was revising its capital expenditure budget for 2020 downward by 26%, or CAD1.5bn ($1.1bn), to CAD3.9-4.5bn ($2.7-3.2bn).
In line with this reduction, Suncor is put- ting several projects on hold. The shelved plans include a CAD1.4bn ($985mn) project to install two cogeneration units at the company’s oil sands base plant in northern Alberta, aimed at reducing greenhouse gas (GHG) emissions from the facility.
Suncor is also halting work on a CAD300mn ($211mn) wind power plant in southern Alberta, which was approved in December 2019.
The moves suggest that more decarbonisa-
CNRL noted
that despite
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w w w . N E W S B A S E . c o m Week 12 26•March•2020