Canadian Natural Resources Ltd. (NYSE: CNQ) on Dec. 5 forecast 2019 capital budget about CA$1 billion (US$753 million) lower than last year, blaming a lack of market access for its oil and “dysfunctional” government processes.
The country’s largest oil and gas producer set 2019 capital budget at around CA$3.7 billion, compared with CA$4.7 billion in 2018, with maintenance capital targeted at about $3.1 billion.
The Calgary-based company expects 2019 production to be between 1.03 million barrels of oil equivalent per day (MMboe/d) and 1.1 MMboe/d.
Oil companies in Canada have pushed back against a decision by the Alberta government to force producers to cut output by 8.7%, or 325,000 barrels per day (bbl/d), until excess crude in storage is reduced.
“Canadian Natural will monitor the impact over time of curtailment on prices as well as the progress of the two export pipelines [Keystone XL and Trans Mountain Expansion] in the final stages of approval,” Executive Vice-Chairman Steve Laut said in a statement.
The company has the capability to adjust 2019 capital spending budget closer to normalized levels based on the outcome of these two factors, he said.
Canada is one of the world’s largest oil producers, supplying more than 4.2 MMbbl/d, but Western Canadian Select (WCS) prices slumped in October to a discount of more than $52 a barrel below WTI due to the transportation constraints and storage glut.
($1 = 1.3278 Canadian dollars)