By Kevin Orland
While other major producers have yet to release spending plans for next year, the projections from Husky and Suncor show energy companies may continue to focus on wringing more profit from their existing output, rather than plowing money into churning out more barrels. After a year in which Canadian oil companies’ output was cut by mandatory production limits, Suncor is projecting a 5% production increase for next year, while Husky sees a 4% boost.
“Looking forward, we will continue to focus on value over volume,” Suncor Chief Executive Officer Mark Little said in a statement. Suncor’s overall capital budget is increasing next year, but the added spending is being directed toward initiatives that will increase the company’s free funds flow, such as a cogeneration facility, digital technology initiatives and a bi-directional pipeline.
The oil sands, which contain the world’s third-largest reserves of crude, have struggled to recover from the 2014-2016 downturn and a shortage of pipeline space that has weighed on prices and restrained production growth. Capital spending in the oil sands already was set to decline for the fifth straight year, to C$12 billion this year from C$33.9 billion in 2014, according to the Canadian Association of Petroleum Producers.