Canadian oil companies take go-slow approach to recovery as prices improve

TORONTO: Canadian oil producers are maintaining a cautious approach, holding spending at reduced levels even as rising prices brighten the outlook.

North American oil prices have rebounded to more than $40 per barrel from a dip into negative prices in April, tempting some producers to increase spending or output.

US shale producers were expected to restore roughly half a million barrels per day (bpd) by the end of June, amounting to a quarter of what they shut since the coronavirus pandemic cut fuel demand and hammered oil prices.

Canada appears to be more cautious. "There is still a lot of water to go under the bridge about uncertainty," Suncor Energy Chief Executive Mark Little said on Tuesday at a TD Securities online investor conference.

"For every positive step forward that some economies are taking, some other economies are putting restart programs on hold. So we have a long way to go to get out of this."

Imperial Oil Ltd, majority owned by Exxon Mobil Corp, sees demand for refined products such as gasoline improving through 2020, along with utilization of refineries, Chief Executive Brad Corson said.

Even so, its reduced capital budget - cut by C$500 million or 30% in March - "still seems pretty realistic," Corson said.

Oil sands producer Cenovus Energy's top priority is debt reduction even as it restores about 60,000 bpd of idled production, Chief Financial Officer Jonathan McKenzie said.

The global oil industry "stops working" with prices below $45, he said. Husky Energy has restored half of the 80,000 bpd that it shut in, said CFO Jeff Hart. It has no plans, however, to restore any capital spending.