Encouraged by higher oil prices, Canadian oil companies are bringing back some of the crude oil production they had curtailed, the top executives of some of the largest firms said at an energy conference.
Husky Energy, Cenovus Energy, ARC Resources Ltd, Baytex Energy Corp, and Imperial Oil are restoring part of the production they had curtailed when prices plunged in March and April. Out of the 1 million barrels per day (bpd) curtailed production in Canada, at least 20 percent is being brought online again, according to Bloomberg estimates.
“We’re seeing a strong price signal to bring production back,” Alex Pourbaix, president and chief executive officer at Cenovus, said on the TD Securities energy conference on Tuesday.
“Nobody should be surprised to see our production moving back to full production capacity. We are significantly cash-flow positive at the levels we’re at now,” Pourbaix said, as quoted by Bloomberg.
Cenovus curtailed around 60,000 bpd production and stopped crude-by-rail shipments when prices plunged. The company has already restored half of the shut-in production, Pourbaix said, as carried by The Canadian Press.
Husky Energy has also restored half of the 80,000 bpd output it had curtailed due to growing demand for crude oil at U.S. refineries, chief financial officer Jeff Hart said.
“We continue now to bring up both our upstream and downstream production in concert with one another and in concert with where we see the end demand,” said Hart, adding that the company expects to restore full production by August at the latest.
U.S. producer ConocoPhillips said at the end of June that it expects to increase production at Surmont in Canada in the third quarter from curtailed levels.
Early on Wednesday, Western Canadian Select (WCS), the oil sands benchmark, traded at $37 a barrel, compared to single digits at the end of April.
By Tsvetana Paraskova for Oilprice.com
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