Canadian Natural Resources, Canada’s largest oil and gas producer, revealed plans on Thursday to explore opportunities for a substantial boost in bitumen output at its primary oil sands mine, Horizon.
President Scott Stauth announced a potential expansion of 195,000 barrels per day (b/d) at the Horizon mining and upgrading plant in northern Alberta, surpassing earlier projections of 75,000 b/d.
The company aims to leverage advanced engineering and scaling processes to enhance production capabilities.
Currently, Horizon has a capacity of approximately 255,000 b/d of synthetic crude oil derived from bitumen.
However, the proposed expansion hinges on factors such as additional pipeline export capacity and governmental backing for carbon capture and storage initiatives, notably the Pathways Alliance project, in which Canadian Natural Resources is a participant.
Stauth emphasized the importance of fiscal policies and enhanced egress capacity for realizing expansion objectives.
Although Canadian Natural Resources anticipates benefits from the Trans Mountain pipeline expansion, enabling it to transport 94,000 b/d, the company faced challenges in the first quarter, missing analysts’ profit estimates.
Lower-than-expected production, coupled with declining natural gas and synthetic crude oil prices, impacted earnings.
Despite producing 1.33 million barrels of oil equivalent per day (boepd), slightly exceeding last year’s figures but falling short of analyst projections, the company experienced a 3% decline in oil sands mining production to 445,209 b/d due to maintenance activities.
Additionally, decreased realized prices for natural gas and synthetic crude oil contributed to reduced earnings.
In response, Canadian Natural Resources plans to adjust drilling activities, shifting focus from dry gas wells to heavy oil, anticipating stronger pricing in the latter half of the year.
As the company navigates these challenges, Canadian Natural Resources shares saw a marginal decline on the Toronto Stock Exchange.
