Cenovus Expects Uptick in Production Next Year

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Amid concerns about the impact of proposed U.S. tariffs, Canadian energy company Cenovus Energy (NYSE:CVE) (Calgary) said it was committed to maintaining a base level of production next year.

Cenovus said Thursday it was committing about 60% of the planned US$3.5 billion in 2025 capital investments on maintaining base production and supporting reliable operations.

During the third quarter, the company reported total production of around 771,000 barrels of oil equivalent per day (BOE/d), which was slightly lower than second quarter figures because of turnaround activity at its Christina Lake oil sands facility in Alberta.

Cenovus during this year's wildfire season had called on non-essential staff to leave its Sunrise project, just outside of Fort McMurray, due to fires raging from the Firebag complex, but saw no major operational impacts.

Looking ahead to next year, Cenovus said it was targeting an upstream production rate of between 805,000 and 845,000 BOE/d, a 4% increase over the expected 2024 average. John McKenzie, the company's president and chief executive officer, added that he expected growth to increase another 150,000 BOE/d by the end of 2028, with support coming from first oil at its Narrows Lake project.

The company announced development plans in September for Christina Lake and Narrows Lake, both also near Fort McMurray. Both projects would yield a combined capacity of around 90,000 barrels of oil per day (BBL/d).

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project Database can read detailed reports on the Christina Lake and Narrows Lake projects.

Future growth would be supported elsewhere by the West White Rose project off the coast of Newfoundland and Labrador. Cenovus expects to see an additional 45,000 BBL/d from the facility over the coming five years, reaching a daily peak of 80,000 BBL/d by 2029.

Subscribers can learn more from a detailed project report.

"We will continue to be focused on controlling costs, improving the profitability of our strategic downstream business and optimizing our advantaged portfolio to deliver value for our shareholders," McKenzie added.

Cenovus added that production increases likely won't ramp up until the second quarter of next year due in part to maintenance activity. For its oil sands programs in Alberta, the company is expected to see operating costs of around $6.50 per barrel.

The investment and production goals come amid concerns about the 25% tariff proposed by U.S. President-elect Donald Trump on all Canadian goods, including energy. With many U.S. refineries geared toward the heavy type of crude oil found in Canada, the country accounts for around 60% of total U.S. oil imports.

Lumber and nearly $2.5 billion worth of other goods and services cross the U.S.-Canadian border daily, according to Canadian Prime Minister Justin Trudeau's office. The prime minister met Tuesday with provincial leaders to strengthen bilateral ties with the incoming Trump administration, but expressed concern about the impact of tariffs.

"They reaffirmed that a 25% tariff on goods crossing the border would only raise prices and increase hardship for hardworking families in both countries," Trudeau's office stated Tuesday.

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Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).