Cenovus Energy Inc. anticipates 2022 capital spending of $2.6-3.0 billion, including growth capital of $200-250 million for completion of the Superior refinery rebuild, as well as capital in the range of $100-150 million to complete the Terra Nova project and Spruce Lake North thermal project, both of which are expected to start up in fourth-quarter 2022.
Cenovus anticipates integration costs related to its combination with Husky Energy of $100-150 million in 2022—the remainder of the expected $500-550 million in total integration costs for the transaction. The targeted annual run-rate of $1.2 billion in synergies has been achieved.
Production guidance
In 2022, Cenovus anticipates total upstream production of 780,000-820,000 boe/d, which includes the impact of major planned turnarounds and about 15,300 boe/d of production divested in 2021.
In the oil sands segment, production is expected to be 570,000-630,000 boe/d in 2022, which includes major planned turnarounds at Foster Creek and Christina Lake.
Cenovus plans to spend $1.4-1.6 billion in the segment, with the increase from 2021 mainly related to additional sustaining capital investment directed towards assets where investment was lower in recent years.
Planned spending of $150-200 million on conventional assets in 2022 includes sustaining drilling programs in the segment and represents a 7% reduction compared to 2021 guidance given dispositions in 2021. Total production in the segment is expected to be 118,000-134,000 boe/d, and takes into account a reduction of about 15,300 boe/d from divestitures in 2021.
Offshore production in 2022 is expected to be 64,000-76,000 boe/d. This includes the expected startup of MDA and MBH fields offshore Indonesia and expected gas sales from Liwan field offshore China. It also includes the anticipated startup of the Terra Nova floating production, storage, and offloading vessel before end 2022 following asset life extension work and reflects Cenovus’s increased working interest of 34%.
Capital spending of $200-250 million will be primarily directed towards the Terra Nova asset life extension project and preservation capital for the West White Rose project. Cenovus and its partners continue to evaluate their options on West White Rose, with a decision on any further investment to be made by mid-2022.
Downstream
With recovering demand for refined products, Cenovus expects to see crude oil throughput at its Canadian and US manufacturing assets increase to 530,000-580,000 b/d, including planned turnarounds. Capital expenditures of $850-950 million reflect a debottlenecking project at the Lloydminster refinery to increase throughput capacity by about 8%, as well as additional spending to support downstream operations and reliability. The range also includes capital for the Superior refinery rebuild project, which the company expects will largely be offset by insurance proceeds. The rebuild remains on schedule and is expected to be completed and ready for startup in first-quarter 2023.
