Canadian oil producer Cenovus Energy is quitting Saskatchewan’s segment of the Williston basin after deciding it is unable to scale the assets up to a size that would be material to its portfolio.
It said the Bakken and Lower Shaunavon properties are up for sale because of competitive limitations on increasing its land base in the area.
Saskatchewan was once seen as a potential contributor to the company’s goal of reaching 75,000 barrels per day of raising tight oil production to about 75,000 bpd by the end of 2016 and had attracted heavy capital spending to raise combined Bakken and Lower Shaunavon output exiting 2012 of 7,000 bpd, up 9 percent from a year earlier.
Cenovus hopes to complete the sale this year.
6,000 bpd by rail
In releasing results for the fourth quarter of 2012, Cenovus said it is currently moving 6,000 bpd of production by rail and hopes to add another 4,000 bpd, with the possible addition of insulated rail cars. Don Swystun, executive vice president of refining, marketing and transportation, said the company is currently moving about 40,000 bpd of its 100,000 bpd of oil sands volumes and 77,000 bpd of conventional crude to tidewater
About 11,500 bpd moves on Kinder Morgan’s Trans Mountain system to Vancouver for shipment to California and Asia and 20,000 bpd is carried on the Pegasus pipeline to the Gulf Coast.
He said Cenovus has committed a combined 175,000 bpd to Enbridge’s proposed Northern Gateway pipeline and the planned Trans Mountain expansion, although both projects are facing stiff opposition.
Swystun said Cenovus plans “significant participation” in TransCanada’s expected open season this year to establish a crude pipeline from Alberta to Ontario and Quebec refineries and possibly extending to the Atlantic Coast.
Source: Petroleum News (Bakken)