Shipping more crude by rail is seen as critical for Canadian oil producers due to congested pipelines that forced Alberta to order mandatory oil curtailments this year.
The Alberta United Conservative Party government said in June that it planned to divest rail contracts amounting to 120,000 barrels of crude per day (bpd) to the private sector this fall. The contracts were signed by the previous New Democratic Party government.
That process looks likely to be wrapped up this month, Canadian Natural President Tim McKay said on a quarterly conference call.
“To go forward with it, obviously it has to make sense, but we’re in the process and we’re looking at it,” McKay said.
A spokeswoman for Alberta Energy Minister Sonya Savage could not be immediately reached to comment on whether the government’s timeline has accelerated.
Canadian Natural currently ships 14,000 bpd, McKay said.
In total, Canadian railways moved 285,131 bpd in May, the most since January when curtailments took effect, according to the National Energy Board.
The curtailments have been effective in draining Alberta’s glut of oil in storage and in averting job losses, McKay said. The company expects the mandatory cuts to last through 2019.
Canadian Natural shares fell 2.8% in Toronto, in line with broad weakness in the sector as global oil prices sank.
The Calgary, Alberta-based company beat estimates for quarterly profit on Thursday, as higher prices for Canadian crude helped offset lower production.
Canadian Natural said average realized prices for crude and natural gas liquids ticked up 3.8%, while natural gas prices climbed 1.5% in the second quarter.
The company, which in June bought U.S. oil and gas producer Devon Energy Corp’s assets in Canada for C$3.8 billion, said quarterly daily production fell to 1.03 million barrels of oil equivalent per day (boepd) from 1.05 million boepd.
Net earnings rose to C$2.83 billion, or C$2.36 per share, in the second quarter ended June 30, from C$982 million, or 80 Canadian cents, a year earlier.
On an adjusted basis, the company earned 87 Canadian cents per share, beating analysts’ estimates for 85 Canadian cents per share, according to IBES data from Refinitiv.