Canadian Natural Resources chairman Murray Edwards prepares to address the company's annual meeting in Calgary on May 9, 2019.Jeff McIntosh/The Canadian Press
Canadian Natural Resources Ltd, Canada’s biggest oil producer, wants the province of Alberta to consider eliminating its restrictions on crude production during summer months, its president said on Thursday.
Alberta has curtailed production for more than a year due to congested pipelines. Many producers reduce output anyway during summer to conduct maintenance.
For that reason, lifting government-ordered curtailments from May until October may make sense, CNRL President Tim McKay said in an interview with Reuters.
Alberta’s oil inventories last year steadily drained during the same period until a leak on the Keystone pipeline in late October backed up supplies again, McKay said.
Inventories are likely to similarly decrease this summer as oil sands companies conduct maintenance, he said.
“It might be an opportunity for the government to get extra revenues,” McKay said, referring to the royalties it collects.
Spokespersons for Premier Jason Kenney and Energy Minister Sonya Savage could not be immediately reached.
Alberta is restricting production to 3.81 million barrels per day in March and April. It has not announced later production levels.
Shares dipped 1 per cent in Toronto to $32.78, touching a nearly six-month low.
The Calgary, Alberta-based company missed fourth-quarter profit estimates as it took a hit from lower oil prices.
It said Executive Vice Chairman Steve Laut would retire by May, but remain on the board of directors.
The company cut its 2020 capital expenditure by $100 million to $3.95 billion, citing volatile crude oil prices, and increased its quarterly dividend by 13 per cent.
McKay said the main impact of the global spread of the novel coronavirus was in pressuring oil prices due to fears of lost demand, and CNRL had not noticed any sales reductions, he said.
“The pipelines are still full.”
Quarterly production rose 7 per cent to 1.2 million barrels of oil equivalent per day (boepd) as producers were allowed exemptions on Alberta’s curtailments if they committed to move oil by rail instead of pipelines.
The company reported net income of $597 million, or 50 cents per share, in the fourth quarter, compared with a net loss of $776 million, or 64 cents per share, a year earlier.
On an adjusted basis, the company earned 58 Canadian cents per share, missing analysts’ average estimate of 70 Canadian cents, according to Refinitiv IBES data.
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