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Cenovus Energy

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Cenovus Energy Inc.
Company typePublic
TSX: CVE
NYSE: CVE
S&P/TSX 60 component
IndustryOil and Natural gas
Founded2009
Headquarters
Calgary, Alberta, Canada
Key people
Alex Pourbaix (CEO),
Keith A. MacPhail (Board Chair)
ProductsOil, Natural gas
Revenue$21.4 billion CAD (2019)[1]
Number of employees
~2,300 (2019)
SubsidiariesHusky Energy
Websitewww.cenovus.com

Cenovus Energy Inc. (pronounced se-nō-vus) is an integrated oil and natural gas company headquartered in Calgary, Alberta.

Cenovus was formed in 2009 when Encana Corporation split into two distinct companies,[2] with Cenovus becoming focused on oil sands assets.

In 2017, Cenovus purchased ConocoPhillips' 50 percent share of their Foster Creek Christina Lake (FCCL) oil sands projects and most of their conventional assets in Alberta and British Columbia, including the Deep Basin.[3][4][5] Cenovus completed the acquisition of Husky Energy for C$3.9 billion in stock in January 2021.[6][7] The combined company is Canada’s third-largest crude oil and natural gas producer and the second-largest Canadian-based refiner and upgrader.[8]

Cenovus is headquartered in Calgary's Brookfield Place, having completed a move from the neighbouring Bow in 2019.[9]

Operations

Oil sands

Cenovus has four producing projects in the oil sands – Foster Creek, Christina Lake (Alberta), Sunrise (jointly owned with BP Canada and operated by Cenovus) and Tucker.[10] All projects use a drilling method called steam-assisted gravity drainage (SAGD). On May 17, 2017, Foster Creek and Christina Lake became 100 percent owned and operated by Cenovus.[5] In December 2021, Cenovus announced the sale of the Tucker oil sands project to Strathcona Resources.[11] In June 2022, Cenovus announced it would acquire the outstanding 50% interest in the Sunrise oil sands asset and assume full ownership.[12]

Conventional oil and gas

Cenovus once held conventional oil and natural gas operations across Alberta and Saskatchewan, including the Weyburn oilfield in Saskatchewan, which is the largest CO2 enhanced oil recovery operation in Canada. It's also the site of the largest geological greenhouse gas storage project in the world, with about 30 million tonnes of CO2 safely stored underground[13] and extensively studied by researchers as part of the International Energy Agency Greenhouse Gas Weyburn-Midale CO2 Monitoring and Storage Project.[14]

In May 2017, Cenovus assumed ownership of ConocoPhillips' conventional assets in Alberta and British Columbia.[5] Cenovus’s current conventional assets include the Deep Basin, a liquids-rich natural gas fairway located in northwestern Alberta and northeastern British Columbia, and the Marten Hills heavy oil project. The Deep Basin asset comprises approximately 2.8 million net acres of land and produced more than 97,000 barrels of oil equivalent a day in 2019. Cenovus also holds a significant land position in the Marten Hills region for potential development. In November 2020, Cenovus announced the sale of the Marten Hills assets to Headwater Exploration Inc.[15]

Refining

Following the acquisition of Husky Energy in January 2021, Cenovus became Canada’s second-largest Canadian-based refiner and upgrader.[16] Cenovus owns the Lima Refinery in Lima, Ohio, the Superior Refinery in Superior, Wisconsin and the Lloydminster refinery and upgrader in Lloydminster, Alberta.[17][18] Cenovus has 50 percent ownership in two refineries in the United States: the Wood River Refinery (Illinois) and Borger, Texas refinery. Phillips 66 is the co-owner and operator.[19] In August 2022, Cenovus reached an agreement to purchase bp’s 50% interest in the bp-Husky Toledo Refinery in Ohio. Cenovus has owned the other 50% of the refinery since its combination with Husky Energy in 2021.[20]

Transportation

Cenovus owns a crude-by-rail loading facility near Edmonton, Alberta – the Bruderheim Energy Terminal. The company was recognized for its rail safety performance in 2016,[21] and for safe transportation of chemical products in 2017.[22]

Technology

The primary technology Cenovus uses at its Foster Creek and Christina Lake projects is called steam-assisted gravity drainage (SAGD). Cenovus also applies different associated technologies to enhance the SAGD process, such as electric submersible pumps at Foster Creek and solvent aided process (SAP) at Christina Lake.

In 2011, the company began applying its blowdown boiler technology to improve the efficiency of water use at its oil sands operations.[23] In 2013, Cenovus developed its SkyStrat™ drilling rig that allows an exploratory rig to be flown into remote areas by helicopter piece-by-piece, set up to drill a test well, dismantled and airlifted away. The process requires no roads, meaning little disturbance to the boreal forest.[24] The company received an Environmental Performance award for the SkyStrat™ program.[25]

Potential mitigation of climate impacts

Cenovus is a member of Oil Sands Pathways to Net Zero initiative, an alliance of oil sands companies working collectively with the federal and Alberta governments to achieve net zero greenhouse gas (GHG) emissions from the companies oil sands operations by 2050. According to Cenovus's Chief Sustainability Officer, the company is pursuing government support for decarbonization efforts, because "[t]hese are not projects that make revenue. So for a corporation that is owned by shareholders to put 100 per cent of the costs into a project that doesn’t bring any revenue back, that is not something that a corporation can do."[26] However, a report by the Canadian Institute for Climate Choices, a source of independent analysis on climate change issues funded by Environment Canada, recommended investing limited public dollars to capture "a share of growing, transition-opportunity markets" rather than in "assets at elevated risk of being stranded in global low-carbon scenarios" as fossil fuel demand "inevitably decline[s] globally".[26]

Leadership

Chairman of the Board

Michael A. Grandin, 2009–2017
Patrick D. Daniel, 2017–2020
Keith A. MacPhail, 2020–

President

Brian C. Ferguson, 2009–2017
Alexander J. Pourbaix, 2017–

See also

References

  1. ^ https://www.cenovus.com/invest/docs/2019/2019-annual-consolidated-financial-statements.pdf [bare URL PDF]
  2. ^ "EnCana proceeds with plan to split into two distinct and independent energy companies" (PDF) (Press release). Encana. September 10, 2009.
  3. ^ Morgan, Geoffrey (March 29, 2017). "Cenovus to buy ConocoPhillips' Canadian assets for a massive $17.7 billion". Financial Post. Retrieved September 11, 2017.
  4. ^ "Cenovus to double production and reserves in Canada". Archived from the original on September 9, 2018. Retrieved May 18, 2017.
  5. ^ a b c "Cenovus completes acquisition of assets in Western Canada from ConocoPhillips". Archived from the original on December 6, 2018. Retrieved May 18, 2017.
  6. ^ Casey, Simon; Tuttle, Robert (October 25, 2020). "Cenovus to Create Canada Oil Giant With $2.9 Billion Husky Deal". Bloomberg. Retrieved October 25, 2020.
  7. ^ Exarheas, Andreas (January 5, 2021). "Cenovus Combines with Husky". Rigzone. Retrieved January 28, 2021.
  8. ^ Inc, Husky Energy (January 4, 2021). "Transaction to combine Husky and Cenovus closes". GlobeNewswire News Room. Retrieved May 17, 2022. {{cite web}}: |last= has generic name (help)
  9. ^ Cenovus Energy Inc. (February 11, 2020). "2019 Annual Information Form". SEC. Retrieved October 25, 2020.
  10. ^ "2021 Annual Report" (PDF). 2021.{{cite web}}: CS1 maint: url-status (link)
  11. ^ "Strathcona Resources to buy Tucker oilsands project from Cenovus in $800M deal". Calgary. December 17, 2021. Retrieved May 17, 2022.
  12. ^ "Cenovus Energy acquires BP's 50% stake in Sunrise oilsands project". CBC. June 13, 2022.{{cite web}}: CS1 maint: url-status (link)
  13. ^ "Canada 150: From early oil wealth to global GHG reduction tech enabler, Saskatchewan's Weyburn-Midale oilfield just keeps giving", JWN, June 28, 2017, retrieved August 31, 2017
  14. ^ Weyburn-Midale published by Petroleum Technology Research Centre
  15. ^ Press, The Canadian (November 9, 2020). "Cenovus selling Marten Hills assets to Headwater in $100M deal - BNN Bloomberg". BNN. Retrieved May 19, 2022.
  16. ^ Inc, Husky Energy (January 4, 2021). "Transaction to combine Husky and Cenovus closes". GlobeNewswire News Room. Retrieved August 2, 2022. {{cite web}}: |last= has generic name (help)
  17. ^ "Upgrading & refining". www.cenovus.com. Retrieved August 2, 2022.
  18. ^ "Cenovus Energy Inc. (CVE) CEO Alexander Pourbaix on Q2 2022 Results - Earnings Call Transcript | Seeking Alpha". seekingalpha.com. Retrieved August 2, 2022.
  19. ^ "Refining Marketing". Phillips 66. Archived from the original on November 2, 2012.
  20. ^ Inc, Cenovus Energy (August 8, 2022). "Cenovus Acquiring Outstanding 50% Interest in Toledo Refinery from bp, Will Assume Operatorship". GlobeNewswire News Room. Retrieved August 18, 2022. {{cite web}}: |last= has generic name (help)
  21. ^ "Rail". Cenovus Energy. Retrieved December 15, 2017.
  22. ^ "Union Pacific Spotlights Safe Chemical Transportation". Union Pacific Railroad. June 26, 2017. Retrieved December 15, 2017.
  23. ^ Technologies lower in situ bitumen recovery costs
  24. ^ "Flying drilling rig". Archived from the original on March 4, 2016. Retrieved September 10, 2015.
  25. ^ Post, Special to Financial (April 22, 2013), "Celebrating industry initiative", Financial Post, retrieved May 2, 2016
  26. ^ a b Graney, Emma (February 14, 2022). "Oil sands CEOs are working together in the race to get to net zero". The Globe and Mail. Retrieved February 14, 2022.
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