Thu, Aug. 13, 12:45 PM
- A key pipeline for delivering Canadian oil to the U.S. remains shut for a third day, leaving heavy crude stranded in Alberta and keeping its price in the cash market at ~$20 below the WTI benchmark.
- A small leak near Shelbina, Mo., coming from Enbridge’s (ENB -1.1%) Spearhead pipeline, which runs from Flanagan, Ill., to the Cushing, Okla., crude hub forced the shutdown Tuesday of the 193.3K bbl/day pipeline as well as a closing of the parallel Flanagan South pipeline, an even larger 585K bbl/day line that runs from Pontiac, Ill., to Cushing.
- ENB expects operations at Flanagan South to resume today, but does not know when Spearhead may return to service, as it continues to investigate the cause of the spill in Missouri.
- Operational problems at BP's (BP -1.5%) Whiting, Ind., refinery also keep the pressure on prices for Canada’s heavy crude as barrels continue to get backed up.
- Other related tickers: SU, IMO, TRP, CNQ, CVE, TCK, CEO, OTCPK:HUSKF, OTCQX:COSWF
- Earlier: Canadian oil sands price nears $20/bbl, cut in half since July 1
Wed, Aug. 12, 12:27 PM
- Crude oil from Canada’s tar sands has slumped to $23/bbl, chopped in half since July 1 and widening its discount to West Texas Intermediate to nearly $20/bbl, due to a combination of steadily rising production, pipeline constraints and an unexpected outage at a U.S. refinery.
- The price plunge has done little to curb output because oil sands projects require years to plan, construct and pay back; Imperial Oil (NYSEMKT:IMO) recently doubled production capacity at its Kearl oil sands project to 220K bbl/day, and Canadian Natural Resources (NYSE:CNQ) last week said it was built to withstand low commodity prices even as it lost C$405M in Q2.
- At current oil prices, typical oil sands producers are just covering their operating costs, while companies with higher operating costs are “losing money with each barrel they’re producing," says the VP of energy research at ARC Financial in Calgary.
- The results have spilled beyond the oil market into Canada’s economy, forcing the central bank to twice cut interest rates, driving the Canadian dollar to a decade low and impacting the debate ahead of October's federal election.
- Other related tickers: TRP, ENB, SU, CVE, TCK, CEO, OTCPK:HUSKF
Wed, Aug. 12, 10:15 AM
- Syncrude is facing an environmental protection order following the deaths of 30 great blue herons at an abandoned sump pond at its Mildred Lake mine site near Fort McMurray, Alberta.
- Although bird deterrents were working elsewhere on the mine site, Syncrude says no such equipment was in operation at the sump.
- Syncrude was fined $3M in 2008 when more than 1,600 ducks died after they landed on a company tailings pond.
- Canadian Oil Sands (OTCQX:COSWF) owns 37% of Syncrude, with stakes also held by lead operator Imperial Oil (NYSEMKT:IMO), Suncor (NYSE:SU), Murphy Oil (NYSE:MUR), Sinopec (NYSE:SNP) and Cnooc (NYSE:CEO).
Thu, Aug. 6, 11:39 AM
- Oil refiner PBF Energy (PBF -0.3%) is shipping a cargo of crude from western Canada to supply its plant on the other side of the continent, a rare move traders say is a sign steep discounts for oil sands are upending established trade routes.
- The deal has sparked speculation about the status of the shipment of up to 500K barrels of crude, with some traders saying PBF picked up a massively discounted cargo coming from the Kearl oil sands projects operated by Imperial Oil (NYSEMKT:IMO) in Alberta.
- Sending the cargo by tanker 7K miles through the Panama Canal to the company's plant in Delaware is "weird," as western Canadian crude comes into the U.S. by train or pipeline, rarely by boat, and almost never to the east coast.
- While it is not clear if it may mark the start of a series of buys, traders say the purchase shows how the deepening discounts for Canadian crude is drawing unusual buyers and overhauling buying strategies by refiners.
Tue, Jul. 28, 1:12 PM
- Canada oil sands pipeline projects look doomed after the recent Nexen oil spill leaves "two big football fields of black goo," according to a Bloomberg analysis.
- A rupture in a line operated by the Cnooc (NYSE:CEO) unit that spewed 31K barrels of bitumen, waste water and sand has ignited outrage from communities along pipeline routes and is strengthening opposition that already has stalled every major crude export project from Canada and may lead to stricter regulations, the report says.
- The Alberta Energy Regulator could consider new requirements including scheduled and random inspections of pipelines during construction and while in operation, as well as better spill detection technology; meanwhile, the spill gets bad press in Canadian newspapers every day.
- Related tickers: TRP, ENB, SU, IMO, CNQ, CVE, TCK, OTCPK:HUSKF, OTCQX:COSWF
Tue, Jul. 7, 6:43 PM
- Barclays’ Paul Cheng predicts all 10 Americas-based oil majors - XOM, CVX, COP, HES, MUR, SU, CVE, IMO, OTCPK:HUSKF, PBR - will beat earnings forecasts, benefiting from strong downstream and chemical performances as well as better than expected production volumes and a lower operating cost environment.
- Cheng estimates the oil majors will exceed the current EPS consensus by a median of 30% while the refiners will beat by 9%.
- Cheng raises his full-year EPS forecast for CVX to $3.75 from $3.55 and for COP to $0.25 from $0.20, but lowers his forecast for XOM to $4 from $4.05.
Fri, Jun. 26, 4:58 PM
- Alberta's government names the top executive of a province-owned bank, ATB Financial CEO Dave Mowat, to head a panel to review oil and natural gas royalty payments and issue recommendations by year’s end.
- The announcement to move ahead with the royalty review, even as oil-rich Alberta struggles with sharply lower crude prices, comes a day after the province said it would double a carbon tax levied on large-scale emitters of greenhouse gases over the next two years.
- Alberta is home of the Canadian subsidiaries of energy giants Exxon Mobil (XOM, IMO), Royal Dutch Shell (RDS.A, RDS.B) and Total (NYSE:TOT), among others.
- Among other top Alberta oil producers: SU, OTCPK:HUSKF, CVE, CNQ, ECA, TLM, OTCQX:COSWF, CPG, OTCPK:PEGFF
Fri, Jun. 26, 4:39 PM
- An oil industry consortium including Exxon Mobil (NYSE:XOM) and BP has suspended its Canadian arctic exploration program in the Beaufort Sea, citing insufficient time to begin test drilling before its lease expires in 2020.
- XOM affiliate Imperial Oil (NYSEMKT:IMO) told Canada's National Energy Board today it had decided to suspend its Beaufort Sea exploratory program and that it would seek to have its current lease extended retroactively to 16 years.
- The move follows a similar decision by Chevron in December to halt its own exploratory drilling program in the Beaufort Sea, after its projects had been slowed by regulatory hurdles and some of the world's highest extraction costs.
Thu, Jun. 25, 1:04 PM
- Alberta's new government says it will raise the province's existing carbon tax on industrial emitters starting next year, the first step in revamping regulations to curb rising greenhouse gas output from surging oil sands production.
- The price will rise to C$20/metric ton in 2016 from C$15 now, and increase to C$30 in 2017, when the rules will expire, the environment ministry says; large emitters will be required to reduce emissions by 15% next year and 20% in 2017, compared with a 12% reduction this year.
- Alberta’s oil sands have become a target for environmentalists because of their significant carbon footprint, and the new NDP government had campaigned on a promise to toughen the province’s environmental standards.
- Among Alberta's top oil producers: SU, IMO, XOM, OTCPK:HUSKF, CVE, CNQ, ECA, TLM, OTCQX:COSWF, CPG, OTCPK:PEGFF
Tue, Jun. 16, 9:45 AM
- Exxon Mobil (XOM +0.1%) and Canadian affiliate Imperial Oil (IMO -0.1%) say production has started at the Kearl oil sands expansion project in Alberta, with all three froth trains operational.
- Production is beginning ahead of schedule, as IMO had said in February that it expected the project to start up in Q3, which was three months ahead of its previous forecast.
- XOM says production from the expansion project is expected to ultimately reach 110K bbl/day, bringing total production from Kearl to 220K bbl/day.
Mon, Jun. 8, 7:03 PM
- Suncor Energy (NYSE:SU) says it has entered into a five-year agreement with Komatsu to purchase new heavy earthmoving trucks for some of its Alberta mining operations that will be "autonomous-ready,” meaning they are capable of operating without a driver.
- SU CFO Alister Cowan says the move eventually will result in 800 fewer jobs, adding that "at an average [salary] of $200K per person, you can see the savings we’re going to get from an operations perspective."
- Driverless trucks aren’t new to the resource industry, as miners Rio Tinto (NYSE:RIO) and BHP Billition (NYSE:BHP) use them at many of their operations, but job concerns are mounting through Canada's oil sands, where companies are looking for ways to cut costs and boost productivity amid the year-long plunge in oil prices.
- The use of autonomous trucks likely will not remain confined to SU; Shell Canada (RDS.A, RDS.B) says it is looking at their use but has no specific timeline in mind, and Imperial Oil (NYSEMKT:IMO) is not saying whether it is testing the trucks at its Kearl oil sands mine, which soon will double production capacity to 220K bbl/day.
Mon, Jun. 1, 2:46 PM
- Canadian oil industry executives say the new plan by Alberta's premier to boost job creation by increasing oil refining and processing in the province instead of elsewhere is an unrealistic "dream" because costs and infrastructure needed for such facilities make it difficult to achieve.
- "There are huge hurdles," a Canadian Natural Resources (NYSE:CNQ) VP said at an RBC Capital conference in New York, such as the fact that U.S. refineries are already set up to handle the heavy crude that Alberta produces: “The best economic solution is to get that crude to these facilities,” said an exec at Imperial Oil (NYSEMKT:IMO), the Canadian company majority owned by Exxon (NYSE:XOM).
- Building a refinery in Alberta would have cost Husky Energy (OTCPK:HUSKF) double what it ended up paying for stakes in existing facilities in Ohio, according to the company's COO.
- The focus on creating jobs should not trump economics, Suncor (NYSE:SU) CFO Alister Cowan told the conference.
Mon, May 18, 10:58 AM
- Imperial Oil (IMO -1.1%) is moving forward on plans to sell ~500 of its remaining company-owned Esso retail sites in Canada and has begun to accept proposals from interested bidders, Reuters reports.
- Parties interested in the assets include Parkland Fuel (OTCPK:PKIUF), Alimentation Couche-Tard (OTCPK:ANCUF) and CST Brands (NYSE:CST), all of which already operate Esso-branded gas stations in the country.
- Analysts say the sites could be worth upwards of C$2M per station, implying that proceeds from the sale could top C$1B ($831M); most of the assets are located in densely populated, high-traffic urban areas and many had car washes and Tim Hortons outlets.
Fri, May 15, 2:45 PM
- Canada says it is committing to cut greenhouse gas emissions by 30% below 2005 levels by 2030, partly by introducing new regulations on its oil and gas sector.
- Environment Minister Aglukkaq says Canada will cut its emissions to 515 metric megatons by 2030 from 726 metric megatons in 2013; earlier this week, Ontario - Canada’s most populous province - set its own 2030 target of 112 megatons, which would represent a 46% cut from 2005 levels.
- To meet the new target, Canada will develop regulations to cut methane emissions from the oil and gas sector, such as industrial leaks and gas flares, as well as new rules to control emissions from the electricity and chemical sectors, including from nitrogen fertilizers.
- Relevant tickers: SU, ENB, TRP, IMO, CNQ, CVE, TCK, TAC, OTCQB:HUSKF, OTCQX:COSWF
Mon, May 11, 2:56 PM
- Exxon Mobil (XOM -1.6%) and Imperial Oil (IMO -0.8%) say they have started bitumen production at the $2B Cold Lake Nabiye project expansion in Alberta.
- XOM says the expansion adds ~20K bbl/day to what is already the largest oil sands operation in Canada, which could double to 40K barrels soon, bringing the total capacity to nearly 200K bbl/day.
- Cold Lake is the largest and longest-running in-situ oil sands operation in Canada, and includes five steam generation and bitumen production plants; the operation produced an average 150K bbl/day of bitumen in recent years.
Thu, May 7, 6:25 PM
- Canadian oil producers plunged for a second straight day as "all bets are off" after election results in Alberta raised concerns over the possibility of higher taxes for the companies.
- Among today's losers: SU -2.6%, OTCQB:HUSKF -5.2%, GTE -5.8%, PWE -5.7%, IMO -1%, CVE -1%, OTCQX:COSWF -3.4%, OTCPK:MEGEF -5%.
- COSWF is among the most exposed to a potential hike in royalties and stricter environmental policies, while electricity supplier TransAlta (NYSE:TAC) would suffer from the new government’s vow to shut coal plants sooner than planned, according to analysts at BMO Nesbitt Burns and RBC Dominion.
- Advice is split on owning stocks of companies that transport and process fuels in Alberta; Raymond James says stocks such as TransCanada (NYSE:TRP) and Enbridge (NYSE:ENB) are less directly exposed to reduced investment in the sector, but RBC advises to sell pipeline and midstream companies with operations in Alberta.
- Analysts also are divided about how much producers with oil refineries, such as SU and IMO, could offset losses from potentially higher royalties by boosting processing of crude in Alberta, a move pro-labor NDP has pledged to support.
IMO vs. ETF Alternatives
Imperial Oil Ltd is engaged in the exploration for, and production and sale of, crude oil and natural gas. The Company's operations are conducted in three main segments namely Upstream, Downstream and Chemical.
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