Cenovus Energy Inc. blasted the Canadian government for not providing enough financial support for the oil-sands industry’s proposed $16.5 billion (US$12.2 billion) carbon capture system. 

The federal government has proposed tax credits covering about half of the capital costs for the project, and Alberta has offered a 12% subsidy. Canada has also said operating costs for the project can be supported with contracts that guarantee a carbon price high enough to make the system profitable. But those incentives have been accompanied by plans for a cap on emissions, which energy producers have criticized. 

“The government-funding partnerships in Canada are not enough for large-scale CCS to proceed in the oil sands,” Rhona DelFrari, Cenovus’s chief sustainability officer, said in an investor day presentation, citing a study by Bank of Montreal. “Canada is employing a complex, multi-layered and evolving stick-based approach with some carrots thrown in. Our closest neighbor to the south is using a straightforward carrot approach that’s far more attractive for CCS projects.”

Canada’s oil-sands producers have banded together to propose a carbon capture system that would help cut emissions from operations by 22 million metric tons by 2030 and help them become carbon neutral by 2050. The submission of regulatory documents for the project is “imminent,” but the draft tax credit regulations lack clarity, and companies need to better understand how the carbon price guarantees will work, she said. 




 




Cenovus Energy To Boost Energy Production 19%

By Julianne Geiger - Mar 05, 2024,

Canada’s Cenovus Energy will boost its energy production by 19% over the next five years, in line with pipeline capacity growth, Cenovus CEO Drew Zieglgansberger said at the company’s annual investor day.

Cenovus has plants to lift production by 150,000 boepd to 950,000 boepd by 2028, the CEO said.

For now, Canada’s heavy oil, produced by Cenovus Energy, Canadian Natural Resources, Suncor, and Repsol, trades at a discount to the U.S. benchmark WTI due to the country’s limited pipeline capacity to export it to foreign markets—namely, the United States.

But the Trans Mountain pipeline expansion—after numerous setbacks—is supposed to be finished in the second quarter, increasing the country’s ability to carry the heavy oil away to the United States and to Asia. The expansion is expected to triple its export capacity to 890,000 bpd.

“This represents a new pathway into global markets,” Zieglgansberger said.

Cenovus Energy stock fell 1.25% on Monday as the Canadian market took a beating, closing short of its 52-week high of C$5.48 that it hit on October 19.

Cenovus Energy held its 2024 Investor Day in Toronto on Tuesday, with the Leadership Team providing updates to the company’s strategy, outlook, and operations. Last month, the company reported that it had just missed analyst estimates for its quarterly profit but exceeded production estimates and refinery throughput volumes. Cenovus Q4 2023 upstream production rose to 808,600 boepd from 806,900 in Q4 2022. Downstream throughput increased to 579,100 bpdmm up from 473,500 bpd a year earlier. Cenovus’s U.S. refineries have shown poorly over the last few years.

Cenovus Energy produces oil and natural gas in Canada and the Asia Pacific region, along with refining and marketing operations in Canada as well as the United States.