Cenovus Energy to cut capital spending by 19% in 2016

Cenovus Energy expects a 2016 capital budget of between $1.4 billion and $1.6 billion, about 19 per cent below this year's level, as the integrated oil company prepares to ride out another year of low prices.

About 20 per cent of next year's capital budget for will be for growth projects, mostly at two Alberta oilsands operations, and 80 per cent will be used to sustain previous investments including at two U.S. refineries that Cenovus jointly owns.

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The two biggest budget items are between $350 million and $400 million for its Foster Creek oilsands project and between $425 and $475 million for the Christina Lake operation.

Another $230 million to $270 million is for the refining business.

Cenovus expects to complete expansion phases at the two oilsands operations by the third quarter of 2016.

It also expects total oilsands production in 2016 will be about seven per cent higher than this year's anticipated level, to between 144,000 and 157,000 barrels per day.

Production from conventional oil will drop to between 55,000 and 59,000 barrels per day, down 15 per cent from this year.

Cenovus expects minimal capital spending at the Pelican Lake heavy oil operations but heavy oil processing capacity will increase by 18,000 barrels per day, once de-bottlenecking at the Wood River refinery is completed in the third quarter.