Page 4 - NorthAmOil Week 19 2022

NorthAmOil COMMENTARY NorthAmOil

Canada’s leading producers

buoyed by high oil prices

Canada’s leading oil sands producers have posted major increases in

profits thanks to high oil prices, but still have various challenges to

contend with

CANADA CANADA’S leading oil sands producers, like others. However, this too is indicative of the cur-
countless other oil and gas players, are reaping rent strength of oil prices, given that even those
WHAT: the benefits of oil prices that have hit multi-year companies reporting lower production still had
Leading Canadian oil highs. Over the past couple of weeks, Cana- their profits rise significantly.
sands producers have dian Natural Resources Ltd (CNRL), Suncor For example CNRL said its profit had more
seen their quarterly Energy, Cenovus Energy and Imperial Oil have than doubled to CAD3.1bn ($2.4bn) in the lat-
profits rise significantly. all posted significant year-on-year increases in est quarter, from CAD1.4bn ($1.1bn) a year ago.
profits for the first quarter of 2022. In some cases, The company, which is Canada’s largest oil and
WHY: they also announced increases to dividends on gas producer, also reported a slight increase in
Oil sands producers, like strong results. quarterly production to 1.28mn barrels of oil
other industry players, However, it has not all been plain sailing, equivalent per day (boepd), up y/y from 1.25mn
are benefiting from crude with some companies having run into opera- boepd. This figure included record natural gas
prices reaching multi- tional challenges over the first quarter, and all production of just over 2bn cubic feet (56.8mn
year highs. of them also having to contend with longer- cubic metres) per day, up y/y from 1.6 bcf (45.3
term concerns relating to their decarbonisa- mcm) per day.
WHAT NEXT: tion plans. Nonetheless, after a particularly CNRL did not hike its dividend for the third
Other pressures remain, challenging few years characterised by two quarter in a row, disappointing some analysts,
including long-term ones price downturns, the onset of the coronavirus but did say that it intended to distribute more
over decarbonisation. (COVID-19) pandemic and the rapid acceler- of its free cash flow to shareholders once its net
ation of the energy transition, the current oil debt reaches CAD8bn ($6.2bn).
price environment offers some breathing space Meanwhile, Imperial posted net income of
to oil sands players. CAD1.2bn ($914mn) in the first quarter of
2022, representing its highest total in 30 years.
Profits up The figure was almost triple what the company
The profits posted by Canada’s leading oil sands achieved a year ago, when it posted net income
players run into billions of dollars and represent of CAD392mn ($305mn). (See NorthAmOil
a doubling, tripling or more compared with a Week 18)
year ago. At the same time, production figures However, the company’s quarterly gross
were something more of a mixed bag, with some upstream production averaged 380,000
of the group seeing output rise even as it fell for boepd, down from 432,000 boepd y/y. The

Imperial was hit by
an outage at its Kearl
mine in the first quarter
owing to extreme
weather.

P4 www. NEWSBASE .com Week 19 12•May•2022