Canadian oil producer Cenovus Energy Inc. said on Dec. 8 that it planned to increase its 2017 capital budget by about 24% and will resume work on the expansion of its oil sands project in Christina Lake.
The Calgary, Alberta-based company said it intended to invest between CA$1.2 billion and CA$1.4 billion (US$1.06 billion), with a target of CA$1.3 billion. That compared with its forecast of CA$1 billion to CA$1.1 billion for 2016.
Cenovus's 2017 oil production will rise 14% to between 223,000 barrels per day (Mbbl/d) and 240 Mbbl/d, while oil sands production is estimated to increase by 20% to between 172 Mbbl/d and 184 Mbbl/d, CEO Brian Ferguson said in a conference call.
Alberta's vast oil sand deposits are the world's third-largest crude reserves, but are more expensive to operate in than conventional oil fields.
Cenovus had reported a third-quarter 2016 loss due to asset impairment charges resulting from declining heavy oil and natural gas prices. Its 2016 capital spending budget was slashed to a range between CA$1 billion and CA$1.1 billion, dropping from the CA$1.1 billion to CA$1.2 billion previously forecast.
"We are confident that the cost reductions we have achieved are largely sustainable and that we can continue to find even more cost efficiencies," Ferguson said.
Cenovus deferred Phase G of its Christina Lake thermal plant in northeast Alberta after crude prices slumped in 2014. It was one of nearly 20 oil sands projects put on hold by producers.
Ferguson said the company will resume work on Christina Lake in northeast Alberta in the first half of 2017.
Cenovus also said it would invest about 70% of the capital budget toward sustaining its oil sands production as well as base production at its other operations.
The company said the rest would be spent on growth projects in its oil sands assets, among other areas.
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