Image: Canadian Natural Resources
(Bloomberg) — Canadian oil sands companies have found a way to ramp up production in the face of oil prices: curtailing lengthy repairs to equipment.
Canadian Natural Resources Ltd., Imperial Oil Ltd. and others are extending maintenance cycles to two-years from one, which saves on capital expenditure, increases output and effectively offsets declining profits from crude prices that have fallen 11% in the past year. Suncor Energy Inc., meanwhile, completed a major coke-drum replacement at its Base Plant more than 3 weeks faster than planned, allowing the company to cut capex guidance by C$400 million in 2025.
The efficiency gains from reducing maintenance times keeps the breakeven for oil sands companies relatively steady at $27 a barrel on average, even with higher cost inflation in recent years, Kevin Birn, chief analyst for Canadian oil markets for S&P Global.
“We have seen their facilities run harder and longer and the volumes are going up from existing infrastructure,” he said. “They are finding ways to get more out of what they have.”
