Page 5 - NorthAmOil Week 45 2022

NorthAmOil COMMENTARY NorthAmOil

The producers have
formed an alliance
to cut emissions by
developing CCS in
the oil sands but are
awaiting government
financial support before
proceeding.

boepd. Its refinery crude throughput also ($4.0bn) over the third quarter.
expanded, by 1.4%, reaching 466,600 barrels Imperial, meanwhile, raised its quarterly div-
per day (bpd) with a refinery utilisation of 100%. idend by 29% from CAD0.34 ($0.25) per share
And Cenovus reported a nearly three-fold to CAD0.44 ($0.33) per share. CNRL also said
gain in quarterly profit, with net earnings rising it was raising its dividend, by 13% to CAD0.85
to CAD1.6bn ($1.2bn), or CAD0.81 ($0.61) per ($0.64) per share.
share, from CAD551mn ($414mn) a year ear- And Suncor also talked up its strategy of
lier. Cenovus’ production rose to 777,900 boepd growing shareholder returns and said it had
in the third quarter, up 2% from 761,500 boepd reduced its net debt by around CAD1.8bn
in the second quarter, but down 3% y/y from ($1.3bn) over the third quarter. Suncor also
804,800 boepd. continued to consolidate its holdings in the oil
Imperial, which is majority owned by Exx- sands, having agreed to buy Teck Resources’
onMobil, reported net income of CAD2.0bn stake in the Fort Hills mine, which it operates, Their priorities
($1.5bn), or CAD3.24 ($2.43) per diluted share, for CAD1bn ($749mn). The acquisition will
for the third quarter of 2022. This was more expand Suncor’s stake in the project from 54.1% – which include
than double the CAD908mn ($680mn) of net to 75.4%. The leading oil sands producers have debt reduction
income that the company achieved in the third been amassing assets in the region over the past
quarter of 2021, despite also representing a several years, and this transaction shows that and returns to
sequential decrease from CAD2.4bn ($1.8bn) there is still some further scope for this trend.
in the second quarter of this year. Meanwhile, the four leading oil sands com- shareholders
Imperial’s production decreased on a y/y panies are also advancing their energy transi-
basis to 430,000 boepd from 435,000 boepd a tion strategies, including through the Pathways – have not
year ago. Alliance, which they are all members of, along changed.
with ConocoPhillips and MEG Energy. The
Maintaining focus alliance is targeting net-zero GHG emissions
Various details from the companies’ third-quar- from the oil sands by 2050, with CCS seen as the
ter releases illustrate that their priorities – which primary means of achieving this goal. However,
include debt reduction and returns to sharehold- the member companies are calling for financial
ers – have not changed even as higher prices have support from the federal government, as well
bolstered their performance. as the provincial government of Alberta, and
For example, Cenovus announced a variable it is unlikely that any final investment decision
dividend and said it intended to renew a share (FID) on CCS infrastructure for the oil sands
buyback programme. The company reduced its will be made until the details of any financial
net debt from CAD7.5bn ($5.6bn) to CAD5.3bn support have been worked out.™

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