Cenovus CEO says heavy oil price discount taking ‘extraordinary’ toll on economy
CALGARY — Higher discounts being paid for Canadian heavy oil versus American crude are having an “extraordinary impact” on the Canadian and Alberta economies, says the CEO of oilsands producer Cenovus Energy Inc.
Every U.S. dollar increase in the price difference between Western Canadian Select bitumen blend and New York-traded West Texas Intermediate costs the company $125 million in revenue, Alex Pourbaix said Thursday.
He estimated a US$10 improvement in the difference on Alberta’s overall output of 3.2 million barrels per day of heavy oil would result in C$50 million a day spilling back into the provincial economy.
“This issue of the spread between Canadian heavy and WTI is having an extraordinary impact on the Canadian economy and the Alberta economy, not just upstream producers,” Pourbaix said, adding the situation amounts to a “transfer of wealth from Alberta and Canada to U.S. refiners and U.S. consumers of refined products.”