{"id":838279,"date":"2026-07-31T14:13:24","date_gmt":"2026-07-31T14:13:24","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/838279\/"},"modified":"2026-07-31T14:13:24","modified_gmt":"2026-07-31T14:13:24","slug":"cenovus-head-sees-growth-from-agreement-signed-by-ottawa-alberta-and-top-oil-producers","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/838279\/","title":{"rendered":"Cenovus head sees growth from agreement signed by Ottawa, Alberta and top oil producers"},"content":{"rendered":"

Open this photo in gallery:<\/a><\/p>\n

CEO Cenovus Jon McKenzie at Intersect 26 in Calgary on May 13. McKenzie says the energy agreement ‘creates a framework for governments and industry to work together.’Todd Korol\/The Globe and Mail<\/p>\n

The energy agreement recently signed by Alberta, Ottawa and Canada\u2019s five largest oil sands companies paves the way for significant production growth, says Jon McKenzie, the head of Calgary-based Cenovus Energy Inc. CVE-T<\/a><\/p>\n

The pact, signed July 2<\/a>, pushes forward a massive carbon-capture project in the province\u2019s north, clearing away another hurdle to the construction of a new West Coast oil pipeline<\/a>, a major priority for both the federal and Alberta governments. It also opens the door to Ottawa and Alberta providing more financial support for Canada\u2019s largest oil sands producers to cut their emissions and expand production.<\/p>\n

Mr. McKenzie said Wednesday that the agreement \u201ccreates a framework for governments and industry to work together on production growth, emissions reduction and expanded market access.\u201d <\/p>\n

However, he remains unimpressed that it also includes \u201can uncompetitive carbon tax\u201d that he said \u201cuniquely burdens Canadian industry.\u201d Mr. McKenzie has railed against<\/a> industrial carbon pricing in the past, arguing that it does nothing<\/a> to encourage the oil and gas sector to reduce its greenhouse-gas emissions. <\/p>\n

Still, the memorandum of understanding \u201crepresents meaningful progress towards creating a competitive investment environment\u201d for the oil sands, he told analysts during an earnings call Wednesday morning. <\/p>\n

\u201cWhat matters most is this agreement signals a willingness to work together to grow the oil and gas sector for the benefit of all Canadians. This is an important step to getting our economy moving forward again,\u201d he said. <\/p>\n

Although the MOU sets the conditions for production growth, Mr. McKenzie said Cenovus\u2019s approach to resource development will remain unchanged, including disciplined spending on capital projects. <\/p>\n

Opinion: Mark Carney\u2019s government loves memorandums of understanding. So, what are they exactly?<\/a><\/p>\n

The final policy details stemming from the MOU are due Nov. 15 \u2013 one month after an Alberta referendum on whether to hold a binding vote on separation from Canada. Prime Minister Mark Carney has made co-operating with Alberta and unleashing its energy sector with an expansion of its fossil-fuel industry a key part of his case for the province remaining in Confederation.<\/p>\n

Regardless of the details in that final agreement, Cenovus has already upped its annual production guidance to reflect a bumper crude output in the second quarter. The company averaged more than 970,000 barrels a day (b\/d) from April through June, with production from its oil sands operations alone hitting more than 786,000 b\/d.<\/p>\n

Mr. McKenzie said the company is \u201cwell on track\u201d to average more than one million b\/d in July \u2013 the first month that the company has ever hit that number. As such, it has boosted its full-year production guidance by roughly 25,000 b\/d to between 970,000 and 1,010,000 b\/d.<\/p>\n

The boost comes mainly from the company\u2019s oil sands operations, including its Narrows Lake project. Roughly 150 kilometres south of Fort McMurray, it is connected to the company\u2019s Christina Lake processing facility and produced first oil in July last year. <\/p>\n

Mr. McKenzie said Narrows Lake \u201ccontinues to exceed expectations\u201d and is producing more than 8,000 b\/d. Eventually, it is projected to produce 20,000 to 30,000 b\/d. <\/p>\n

\u201cThe growth we expected from Narrows Lake is coming much sooner than forecast. Notably, we reached the production rate we expected to get from the first five well pads from only the first four well pads,\u201d he said. <\/p>\n

Production at the company\u2019s Foster Creek facility \u2013 roughly 350 kilometres northeast of Edmonton, in the Cold Lake oil sands region \u2013 was around 215,000 b\/d, about 8,000 less than the prior quarter. Cenovus attributed that to \u201can unplanned disruption\u201d at the site in late May. <\/p>\n

The company\u2019s Sunrise facility, 60 kilometres northeast of Fort McMurray, reached its production target a year before its original 2027 date, and is regularly exceeding 70,000 b\/d, Mr. McKenzie said. <\/p>\n

Cenovus reported net earnings of $2.87-billion for the second quarter, compared with $851-\u200bmillion a year earlier. <\/p>\n

Its total revenues were $17.4-billion in the second quarter, up from $12.4-billion in the first quarter of 2026.<\/p>\n","protected":false},"excerpt":{"rendered":"Open this photo in gallery: CEO Cenovus Jon McKenzie at Intersect 26 in Calgary on May 13. McKenzie…\n","protected":false},"author":2,"featured_media":838280,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[194295],"tags":[49,48,292222,20739],"class_list":["post-838279","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ottawa","tag-ca","tag-canada","tag-cve-t","tag-ottawa"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/838279","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=838279"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/838279\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/838280"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=838279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=838279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=838279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}