The first stage in the planned Alberta oilsands environmental cleanup is to be a carbon capture, utilization and storage (CCUS) network able to collect greenhouse gas (GHG) emissions from 20 operations, according to bitumen producer Cenovus Energy Inc.
“Discussions are ongoing with the federal and provincial governments to ensure the necessary policy and financial support is in place,” Cenovus said Tuesday in discussing fourth quarter and full year 2021 results.
“This first project is expected to include a pipeline with phased expansion capability to gather carbon dioxide from 20 oilsands facilities,” according to Cenovus, a founder of the Oil Sands Pathways to Net Zero industry coalition. “The pathways alliance is also progressing work to assess the feasibility of multiple other GHG-reducing technologies.”
Oilsands production continues to drive growth for the company as well. Liquids output during the quarter was led by oilsands plants and raised by former sites operated by Husky Energy Inc., jumping to 678,300 b/d from 405,300 b/d in the year-ago period. Annual average production grew to 642,300 b/d in 2021 from 408,400 b/d in 2020, according to Cenovus.
Cenovus announced that it would take over rival Husky in October 2020. The deal closed on Jan. 31, 2021.
Natural gas production, dominated by the assets acquired from Husky, grew to 883.5 MMcf/d in the last three months of 2021, from 369.5 MMcf/d in the prior year period. Annual average output climbed to 895.5 MMcf/d in 2021 from 379 MMcf/d in 2020.
The firm booked a C$1.8 billion 2021 “downstream” loss on its refining and retailing interests in the United States and Canada because of high expenses and accounting charges. Performance is set to improve this year, according to CEO Alex Pourbaix.
“In our first year as a combined company, we delivered exceptional operational performance at our upstream business, successfully integrated the assets acquired in the Husky transaction and aggressively reduced debt, creating a stronger company,” Pourbaix said.
About C$1.9 billion in 2021 asset sales included 337 Husky service stations. The sales helped Cenovus cut its long-term debt to C$12.4 billion as of year-end 2021 from C$14.1 billion a year earlier. Repayments continue as buyer payments arrive in 2022.
No additional assets included in the Cenovus-Husky combination have been put up for sale. “While Cenovus will always consider opportunities to optimize its asset portfolio, the company does not anticipate further significant divestitures in the near future,” said the CEO.
Cenovus reported a fourth quarter net loss of C$408 million (minus 21 cents/share), compared to losses of C$153 million (minus 12 cents) in 4Q2020. The firm attributed its 2021 year-end red ink to one-time, non-cash accounting items.
Cenovus posted full-year 2021 earnings of C$587 million (27 cents). The results reversed 2020 losses of C$2.37 billion (C$1.94).
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