Husky Energy is cutting it’s 2020 spending by $1 billion in response to the current drop in oil prices.
The company is reducing its 2020 capital program by $900 million, a 33 per cent reduction in upstream spending, and another $100 million in cost-saving measures. Husky had previously planned to invest $2.6 to $2.8 billion in the upstream sector. They have now pushed it down to $1.75 to $1.9 billion. The company will slow down on well servicing on “uneconomic production” and will stop exploration activities.
The company will be shutting-in production in areas where it is cash negative. Lloydminster thermal projects scheduled for 2020 such as the Spruce Lake East, Edam Central and Dee Valley 2 projects have been postponed until the market improves.
Other thermal projects such as the Spruce Lake North and Spruce Lake Central projects will be completed.
Husky spokesperson Kim Guttormson says downstream projects such as the upgrader will be unaffected. She says the turnaround to increase diesel production from 6,000 barrels a day to 9,800 will proceed as planned. The turnaround is expected to take six weeks to complete.
Investments in heavy oil projects in western Canada have been halted as has drilling at all thermal operations. The company will also slow down on well servicing and will halt exploration activities.