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Rail News Home Shippers

3/16/2020



Rail News: Shippers

Cenovus suspends crude-by-rail program


As a result of suspending its crude-by-rail business, Cenovus will no longer make use of credits under the province of Alberta's special production allowance program
Photo – cenovus.com

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Cenovus Energy Inc. announced last week it will temporarily halt its crude-by-rail program due to falling crude oil prices.

In addition, the Canadian oil and natural gas producer is reducing its 2020 capital spending by 32 percent and deferring final investment decisions on major growth projects, company officials said in a press release.

As a result of suspending its crude-by-rail business, Cenovus will no longer make use of credits under the province of Alberta's special production allowance program, which gives oil producers temporary curtailment relief equivalent to incremental increases in rail shipment.

Alberta established the program to help address the transportation of oil during pipeline delays that are affecting the oil and gas sector.

Cenovus estimated its 2020 oil sands production will average 350,000 to 400,000 barrels per day, about 6 percent lower than the company's guidance issued on Dec. 9, 2019.