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Dec 8, 2016

Cenovus won’t ‘in any way, shape or form’ rely on OPEC amid plan to boost spending 24%

Cenovus Energy CEO Brian Ferguson

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The chief executive officer of Cenovus Energy (CVE.TO) is vowing not to leave his company at the mercy of forces beyond its control as it gears up to boost capital spending 24 per cent next year.  

“I’m not in any way, shape or form going to rely on what OPEC may or may not do; what the price of oil may or may not do,” Cenovus CEO Brian Ferguson told BNN on Thursday hours after the company released its 2017 budget and announced the restart of expansion work at its Christina Lake oil sands project in Alberta. “We are very focused on continuing to drive improvements in our cost structure, where we have had significant accomplishments over the last two years; and, very importantly, maintaining the strength of our balance sheet.”

Ferguson told BNN Western Bureau Chief Tara Weber that the company now has nearly $8 billion in available liquidity, between cash and undrawn credit, allowing the company some leeway to move forward with plans like Christina Lake.

“[This] puts us in a position now to reactivate, in a very disciplined manner, in investment opportunities and growth for our shareholders,” he said.

However, Ferguson does not expect the budget expansion to mean an increase in the company’s head count.

“Our plan in terms of our direct employees is that we will continue to have no net change in our overall employee count in 2017 compared to 2016,” he said. 

“We were previously staffed to be able to proceed with five simultaneous oil sands projects at one time. Today we’re staffed to be able to proceed with up to two oil sands projects,” Ferguson said when asked about returning staffing to levels seen just a few years ago.

The company said on Thursday about 70 per cent of its 2017 capital budget would go towards sustaining its oil sands production and base production at its other operations with the rest going towards growth projects in its oil sands assets.


The investment is expected to total $1.2 billion-$1.4 billion versus a 2016 forecast of $1 billion-$1.1 billion.

The Christina Lake expansion was paused in 2014 due to declining oil prices.

"With the tremendous progress we've made over the last two years in reducing operating costs and sustaining capital, we're confident we can move forward with projects that have strong potential to drive shareholder value," Ferguson said in a release.

With files from Reuters and The Canadian Press