CNRL unveils $4.2bn capital budget for 2025, including CCS spending

Canadian Natural Resources Ltd (CNRL) said last week that it had set an operating capital budget of CAD6bn ($4.2bn) for 2025.

This comes as the company works to achieve average production of 1.510-1.555mn barrels of oil equivalent per day (boepd) in 2025. This range would represent output growth of around 170,000 boepd, or 12%, compared with 2024 based on the mid-point of guidance. CNRL said it was targeting a production mix of roughly 47% light crude oil, natural gas liquids (NGLs) and synthetic crude oil (SCO), 26% heavy crude oil and 27% natural gas, based on the mid-point of its guidance range.

“Our high-quality, diversified asset base combined with our flexible capital allocation strategy is a significant competitive advantage,” stated CNRL’s president, Scott Stauth. “Our disciplined and focused approach allocates capital and optimises the product mix based on the highest return projects, maximising value for our shareholders.”

Meanwhile, CNRL’s chief financial officer, Mark Stainthorpe, reiterated the company’s commitment to delivering returns to shareholders.

It is notable that CNRL intends to maintain its budget for carbon capture initiatives, despite uncertainty over Canada’s decarbonisation policy in the wake of Canadian Prime Minister Justin Trudeau’s resignation. The company said it would spend CAD90mn ($62.8mn) on carbon capture and storage (CCS) projects in 2025. On a call with investors, Stauth said this would primarily be spent on engineering work for the Pathways Alliance CCS project, as well as at the Scotford upgrader and CNRL’s Horizon oil sands site and thermal oil sands properties.

“We’re progressing these carbon capture projects on from an engineering perspective for 2025,” Stauth said.

CNRL is participating in the Pathways Alliance consortium alongside Cenovus Energy, Suncor Energy, Imperial Oil, MEG Energy and ConocoPhillips. Together, these companies account for around 95% of Canada’s oil sands production. The Pathways Alliance is proposing to develop a CAD16.5bn ($11.5bn) CCS network to help decarbonise the oil sands. However, the project has yet to reach the final investment decision (FID) stage and potential federal funding has yet to be confirmed – with Trudeau’s departure casting further uncertainty over the venture’s prospects.

Nonetheless, Stauth told the investor call that CNRL wanted the Pathways project to move forward regardless of which direction Canadian decarbonisation policy takes from here.