Canada’s oil producers lowered their capital expenditures for 2019 due to volatility in crude prices and mandatory production cuts in the province of Alberta.Imperial Oil Ltd said on Friday it would delay its C$2.6 billion Aspen oil sands project in Alberta by about a year after the provincial government imposed output cuts to tackle pipeline bottlenecks.
“As part of its 2019 capital budget, the company had earmarked C$800 million in Aspen related spending, which will presumably come down,” RBC Dominion Securities analyst Greg Pardy said in a note.
Alberta Premier Rachel Notley said in December the Alberta would mandate temporary oil output cuts of about 325,000 barrels per day to deal with a pipeline bottleneck that has led to a glut of crude in storage and pushed down Canadian crude prices.
Companies with refineries like Imperial Oil and Husky Energy Inc , which have been hit by the subsequent rise in cost of crude feedstock, have slammed the government’s decision.
Global crude prices have also been under pressure on concerns over a supply glut and an economic slowdown.
Suncor Energy said its 2019 capital expenditure would be between C$4.9 billion and C$5.6 billion, which is largely flat compared to 2018.
Other companies to trim their budgets include: Crescent Point Energy, Husky Energy, Cenovus Energy, Canadian Natural Resources and MEG Energy Corp.