Page 4 - NorthAmOil Week 10 2022

NorthAmOil COMMENTARY NorthAmOil

Canadian maintenance plans

add to supply jitters

Planned maintenance is anticipated to take roughly 5% of Canadian crude

production offline this spring, adding to supply worries as crude prices hit

multi-year highs

ALBERTA CANADA’S oil sands are heading into their Outage expectations
annual spring maintenance season. However, Around 5% of Canadian crude output will go
WHAT: this year, the planned turnarounds will coincide offline this spring as a result of maintenance
Around 5% of Canada’s with rising oil prices and global supply concerns work, according to analyst estimates cited by
oil production is expected amid the Russian invasion of Ukraine. Reuters.
to go offline this spring Worries about supply shortages represent a “Based on the guidance from various compa-
as a result of planned significant turnaround from just two years ago, nies on turnarounds we are assuming 250,000
maintenance. when the coronavirus (COVID-19) pandemic barrels per day [bpd] is down for the entirety
caused a rapid drop in oil demand and prices. of the second quarter,” a Tudor, Pickering, Holt
WHY: At the time, there were even fears that storage and Co. (TPH) analyst, Matt Murphy, was
Oil sands producers capacity could run out. Now, conversely, there quoted as saying by the news service.
typically carry out are concerns over the impact additional sup- Reuters also cited traders in Calgary as say-
maintenance in the ply shortages could have on oil prices that have ing that a supply crunch for synthetic crude
spring, but this year it already hit 14-year highs briefly in recent days would intensify in May, when maintenance
will coincide with high before dropping back slightly. starts on both Canadian Natural Resources Ltd’s
prices and global supply Beyond the maintenance season, Canada is (CNRL) Horizon upgrader and Suncor Energy’s
concerns. being touted as one of the countries that could U2 upgrader. Indeed, there are already supply
potentially ramp up output, helping to put disruptions, with Shell issuing a force majeure
WHAT NEXT: downward pressure on rising oil prices. But declaration at its 300,000 bpd Scotford upgrader
Industry supporters are those arguing for this to happen will find them- last week after a unit at the facility tripped. That
increasingly calling for selves clashing with opponents of further oil upgrader is scheduled to begin a 65-day turna-
Canada step up exports sands development on environmental grounds round later this month, according to an investor
to the US to offset lost as the question of how to balance energy tran- presentation from CNRL, which owns a stake
Russian volumes. sition goals with current oil demand becomes in the project. A separate Reuters report cited
increasingly important. traders as saying Shell had cut its deliveries for

P4 www. NEWSBASE .com Week 10 10•March•2022