Page 4 - NorthAmOil Week 12 2023

NorthAmOil COMMENTARY NorthAmOil

IPC calls on Canadian government

for more CCS incentives

International Petroleum Corp. has said it could invest in carbon capture and storage in

Canada’s oil sands if more federal incentives are offered

CANADA INTERNATIONAL Petroleum Corp. (IPC), an First oil is forecast in late 2026. In the com-
oil sands producer, has called on Canada’s federal pany’s financial results for the end of 2022, IPC
WHAT: governmentto provide more incentives for car- said that Phase 1 would mature 218mn barrels of
International Petroleum bon capture and storage (CCS). oil equivalent (boe) into probable or 2P reserves.
Corp. has said it could IPC is the first foreign oil company to green- The company also said that from 2023-2027, its
invest in carbon capture light a project in Alberta’s oil sands in more than business plan forecast is spend $10 in capital per
and storage in Canada’s 10 years. IPC’s CEO, Mike Nicholson, said that boe for the Blackrod Phase 1 project.
oil sands if more federal his company could invest in CCS if more federal The pressure for CCS incentives from IPC
incentives are offered. incentives were offered. comes as Canadian Prime Minister Justin
“There’s still an opportunity – if we can have Trudeau’s government is gearing up to release
WHY: some sensible government decisions about get- its annual budget on March 28. Many see the
The company recently ting serious about meeting climate targets – that budget as a chance for Trudeau to answer US
approved development of if the right incentives come along, we’re in a very President Joe Biden’s Inflation Reduction Act
a new oil sands project. good position to look at carbon capture down (IRA) of August 2022, which provided an
the line,” Nicholson told Reuters recently. investment tax credit (ITC) for CCS.
WHAT NEXT: The company, which has several oil sands Trudeau’s Finance Minister Chrystia Freeland
Ottawa is preparing to development in production, will continue pay said recently that Canada must increase invest-
release its annual budget the federal carbon tax, which is set to rise to ments in the energy transition. She said that the
amid calls to include CAD170 ($124) per tonne by the end of the government’s 2023-2024 budget will make a
more support for CCS. decade, he said. “serious investment” in clean technologies.
“We ... can invest aggressively in the clean
Blackrod economy of the 21st century in a smart, focused,
In early February, IPC sanctioned the develop- Canadian way. Or we can be left behind,” added
ment of $850mn Blackrod Phase 1 in northern Freeland, in a speech in Ontario on March 20.
Alberta following the completion of front-end She gave no details. The minister did stress,
engineering design (FEED) studies. The Black- however, that the budget would be fiscally
rod lease has an estimated 1.3bn barrels of con- responsible.
tingent reserves. Trudeau’s Liberal government has established
The small thermal project, which uses steam a national goal of cutting carbon emissions of
assisted gravity drainage (SAGD) technology, 40%-45% below 2005 levels by 2030. Interna-
will have an expected production of 30,000 bar- tionally, Canada is seen as a climate laggard.
rels of oil equivalent per day (boepd) by 2028. Even so, in April 2022 Trudeau proposed an
Construction will start in 2024. It has been on investment tax credit (ITC) to cover 50% of
pilot production since 2011 and is running two the cost of CCS equipment, with a tax credit
out of three test well pairs. expected to cost CAD1.5bn (1.1bn) annually

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