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But the COVID-19 pandemic and oil price crash in 2020 caused a “massive disruption in capital spending” by U.S. producers last year, Pourbaix said. The fallout from that oil price crash and the election of Biden “create the opportunity for a positive situation for Canadian heavy.”
Still, Biden’s executive order to kill TC Energy Corp.’s 830,000-barrels-per-day Keystone XL pipeline linking Alberta’s oilsands with heavy oil refineries in Texas and Louisiana on his first day in the office is a “tragedy” for the Canadian oil industry, said Pourbaix who previous was an executive at the pipeline company.
“This is certainly the most exhaustively reviewed project in the history of pipelines from an environmental perspective,” Pourbaix said. “You’re already seeing the impact on thousands of workers in Canada and the U.S. It certainly was not happy news and I think unnecessary, unwarranted and damaging for both countries.”
(Keystone XL) certainly was not happy news and I think unnecessary, unwarranted and damaging for both countries
Alex Pourbaix, Cenovus CEO
However, Cenovus’s acquisition of Husky Energy Inc. reduces the company’s need for the Keystone XL pipeline because it will be able to send more of its own crude oil production to Husky refineries in the United States. The deal closed earlier this month.
“The large majority of our production we can find a home for and we no longer need to sell at Hardisty (Alberta) and be exposed to that light-heavy differential in the (Alberta) province,” Pourbaix said.
Barrels of Western Canadian Select heavy oil traded at US$39.81 on Thursday. By comparison, the West Texas Intermediate benchmark traded down roughly 1 per cent to US$52.34 per barrel by close Thursday.
