Imperial Oil Ltd said on Friday it would delay its C$2.6 billion ($1.95 billion) Aspen oil sands project in Alberta by about a year after the provincial government imposed output cuts to tackle pipeline bottlenecks.
“As part of its 2019 capital budget, the company had earmarked C$800 million in Aspen related spending, which will presumably come down,” RBC Dominion Securities analyst Greg Pardy said in a note.
Alberta Premier Rachel Notley said in December the Alberta would mandate temporary oil output cuts of about 325,000 barrels per day to deal with a pipeline bottleneck that has led to a glut of crude in storage and pushed down Canadian crude prices.
Companies with refineries like Imperial Oil and Husky Energy Inc , which have been hit by the subsequent rise in cost of crude feedstock, have slammed the government’s decision.
Global crude prices have also been under pressure on concerns over a supply glut and an economic slowdown.
Suncor Energy said its 2019 capital expenditure would be between C$4.9 billion and C$5.6 billion, which is largely flat compared to 2018.
Other companies to trim their budgets include: Crescent Point Energy, Husky Energy, Cenovus Energy, Canadian Natural Resources and MEG Energy Corp.