CNRL links plan to Alberta debottlenecking

Dec. 5, 2018
Canadian Natural Resources is linking its capital spending plan for 2019 to the debottlenecking of oil production in Alberta. Citing “a lack of market access and a dysfunctional pipeline nomination process” in Canada, the company plans a “base capital program” of $3.7 billion (Can.) in 2019, about $1 billion below its longer-term, “normalized capital program” and the outlay expected this year.

Canadian Natural Resources Ltd., Calgary, is linking its capital spending plan for 2019 to the debottlenecking of oil production in Alberta.

Citing “a lack of market access and a dysfunctional pipeline nomination process” in Canada, the company plans a “base capital program” of $3.7 billion (Can.) in 2019, about $1 billion below its longer-term, “normalized capital program” and the outlay expected this year.

The base 2019 budget includes $3.1 billion in sustaining capital and $600 million for long-term growth projects.

But CNRL noted that crude prices in Canada increased after the Alberta government’s Dec. 2 announcement of a 325,000-b/d curtailment to production of crude and bitumen, beginning in January (OGJ Online, Dec. 3, 2018). It said it will monitor effects of the production cut and progress on the planned but delayed expansions of the Keystone XL and Trans Mountain pipelines.

“Dependent on the outcome of these two factors, Canadian Natural has the capability to adjust our 2019 capital spending budget closer to normalized levels,” it said, adding the adjustment could be as much as $700 million.

CNRL Pres. Tim McKay said the company plans to start steaming at its Kirby North steam-assisted gravity drainage project in the Athabasca oil sands region of Alberta in the third quarter this year and to begin production in the fourth quarter of 2019. Production is to reach 40,000 b/d in the first half of 2021.

The company also will start flow from new pads at its Primrose cyclic steam stimulation development in the Cold Lake region that eventually will add 26,000 b/d of production.

“Production volumes from both thermal projects are strategically targeted to align with improved market access,” McKay said.