What is the story about?
What's Happening?
Canadian oil sands companies, including Canadian Natural Resources Ltd. and Imperial Oil Ltd., are extending maintenance cycles to two years from one, which saves on capital expenditure and increases output. This strategy offsets declining profits due to a 11% drop in crude prices over the past year. Suncor Energy Inc. has also completed a major coke-drum replacement at its Base Plant ahead of schedule, reducing its capital expenditure guidance by C$400 million for 2025.
Why It's Important?
The ability of Canadian oil sands companies to increase output while reducing capital expenditure is crucial in maintaining profitability amidst fluctuating oil prices. By extending maintenance cycles and optimizing existing infrastructure, these companies can keep their breakeven costs steady, which is vital for sustaining operations and competitiveness in the global oil market. This approach may serve as a model for other energy companies facing similar economic pressures.
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