Released March 07, 2025 | SUGAR LAND
en
Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Heavy-oil focused Athabasca Oil Corporation (Calgary, Alberta) said it would be able to break even with U.S.-contracted oil at $40 per barrel, adding a weakened Canadian dollar could act as a buffer against U.S. tariffs.
Earlier this week, U.S. President Donald Trump enacted a 10% tariff on energy imports and another 25% tariff on all other goods imported from Canada, but reversed course for some goods covered under the U.S.-Mexico-Canada Agreement (USCMA) on Thursday. USCMA was a Trump-brokered revision to the North American Free Trade Agreement.
Tariffs are a tax on imports, and the extra cost will trickle down to the U.S. consumer, though tariffs cut both ways. They will put a damper on the Canadian oil industry and weigh on its overall economy.
Bruised already by Trump's economic policies, the price of oil is on a downward trend. West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, was trading in positive territory before the start of trading Thursday after Trump offered tariff concessions for automakers. But it's down about 6% on the year to trade in the mid-$60 range, after starting the year at $72.50 per barrel.
Athabasca said Wednesday it was competitive at about $50 per barrel, expected some cash flow at about $60 per barrel, but would break even at $40 per barrel WTI. The company said a weakened Canadian dollar would offset the blow from sanctions.
Processing heavy crude along with reserves in the Duverney Shale in southwestern Alberta, Athabasca said it produced an average of 36,815 barrels of oil equivalent per day (BOE/d) last year, a 7% increase over 2023 levels.
Most of that came from its thermal oil operations, which rely on heat to bring the oil to the surface. At its Leismer site in Alberta, the company said an expected increase in upstream activity could bring production capacity to 40,000 barrels per day (BBL/d), up from 28,000 BBL/d in 2022.
Production there is expected to ramp up to 2027. Meanwhile, the company said it has diverse midstream connections across North America. It will book about 7,200 BBL/d on the existing Keystone Pipeline to the U.S. Gulf Coast. Through an intermediary, it has another 10,000 BBL/d moving through a network running to PADD 2 in the U.S. via arteries controlled by Enbridge.
"Industry market access is expected to be further supported by expansions on the Enbridge and Trans Mountain Pipeline systems, along with the possible revival of new pipeline projects," the company added.
Trans Mountain runs to British Colombia, offering Canadian energy producers a way out of North America.
Canada delivers about 4 million BBL/d to the U.S., representing about 60% of total U.S. imports. Provincial and federal leaders have considered a tit-for-tat response to Trump's tariffs, with Prime Minister Justin Trudeau damning his U.S. counterpart for turning his back on decades of friendship.
In oil-rich Alberta, they're pulling U.S-made goods off the shelves.
"I understand this is an uncertain time for many Albertans, and our government will continue to do all it can to prioritize Alberta's and Canada's world-class products and businesses as we face this challenge together," Premier Danielle Smith said.
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) platform 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 more than 200,000 current and future projects worth $17.8 trillion (USD).
Earlier this week, U.S. President Donald Trump enacted a 10% tariff on energy imports and another 25% tariff on all other goods imported from Canada, but reversed course for some goods covered under the U.S.-Mexico-Canada Agreement (USCMA) on Thursday. USCMA was a Trump-brokered revision to the North American Free Trade Agreement.
Tariffs are a tax on imports, and the extra cost will trickle down to the U.S. consumer, though tariffs cut both ways. They will put a damper on the Canadian oil industry and weigh on its overall economy.
Bruised already by Trump's economic policies, the price of oil is on a downward trend. West Texas Intermediate (WTI), the U.S. benchmark for the price of oil, was trading in positive territory before the start of trading Thursday after Trump offered tariff concessions for automakers. But it's down about 6% on the year to trade in the mid-$60 range, after starting the year at $72.50 per barrel.
Athabasca said Wednesday it was competitive at about $50 per barrel, expected some cash flow at about $60 per barrel, but would break even at $40 per barrel WTI. The company said a weakened Canadian dollar would offset the blow from sanctions.
Processing heavy crude along with reserves in the Duverney Shale in southwestern Alberta, Athabasca said it produced an average of 36,815 barrels of oil equivalent per day (BOE/d) last year, a 7% increase over 2023 levels.
Most of that came from its thermal oil operations, which rely on heat to bring the oil to the surface. At its Leismer site in Alberta, the company said an expected increase in upstream activity could bring production capacity to 40,000 barrels per day (BBL/d), up from 28,000 BBL/d in 2022.
Production there is expected to ramp up to 2027. Meanwhile, the company said it has diverse midstream connections across North America. It will book about 7,200 BBL/d on the existing Keystone Pipeline to the U.S. Gulf Coast. Through an intermediary, it has another 10,000 BBL/d moving through a network running to PADD 2 in the U.S. via arteries controlled by Enbridge.
"Industry market access is expected to be further supported by expansions on the Enbridge and Trans Mountain Pipeline systems, along with the possible revival of new pipeline projects," the company added.
Trans Mountain runs to British Colombia, offering Canadian energy producers a way out of North America.
Canada delivers about 4 million BBL/d to the U.S., representing about 60% of total U.S. imports. Provincial and federal leaders have considered a tit-for-tat response to Trump's tariffs, with Prime Minister Justin Trudeau damning his U.S. counterpart for turning his back on decades of friendship.
In oil-rich Alberta, they're pulling U.S-made goods off the shelves.
"I understand this is an uncertain time for many Albertans, and our government will continue to do all it can to prioritize Alberta's and Canada's world-class products and businesses as we face this challenge together," Premier Danielle Smith said.
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) platform 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 more than 200,000 current and future projects worth $17.8 trillion (USD).
