Canadian Natural Resources underperforms in second quarter

Aug. 3 (UPI) — Canadian Natural Resources reported a decline in net production during the second quarter, pointing to planned transitions at the company as the reason.

The producer reported 1.05 million barrels of oil equivalent production for the second quarter, an increase of 15 percent from the same period last year, but 6.5 percent lower than first quarter 2018.

Most of the company’s production is in oil and total output was 7 percent lower than during the first quarter, but 25 percent higher year-over-year. The company attributed the decline to upgrades at its thermal processing units and other transitory efforts.

“Our asset base is a key competitive advantage providing significant capital flexibility and as a result, to maximize value, we are shifting capital from primary heavy crude oil to light crude oil,” Tim McKay, the company’s president, said in a statement.

In terms of profits, the company’s second quarter results were down by nearly 10 percent.

Thermal processing is used to add viscosity to heavier oil sands in Alberta. Lighter crude would be similar to the type of found in the Lower 48 U.S. states.

The company’s production trends are in contrast to data from the provincial government in Alberta. In a financial update to Thursday, the government reported that crude oil production was more than existing pipelines could handle, forcing oil producers to turn to rail to make up for the difference.

The provincial government said crude oil exports by rail set an all-time record in May, surging 50 percent from last year.

More than 40 people died in Lac-Megantic, Quebec, in 2013 when a train carrying oil derailed and exploded.

“Despite the surge, crude by rail volumes remain quite modest in relation to Alberta’s total production of nearly 3.4 million barrels per day,” the provincial government reported.

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