How Husky Energy is surviving amid decreasing oil prices
Husky Energy, one of Canada’s largest integrated energy companies, continues to hold its head above water amid low oil prices.
According to CBC News, the company reported a Q2 profit of $120 million. The earnings are attributed to its refining operations, which contributed $350 million to cash flow in the quarter.
While the company’s profits are down 81 per cent from the same quarter last year, Husky Energy is one of three integrated energy companies reporting earnings. Suncor and Imperial Oil are also enjoying higher margins over the spring and summer seasons.
Canadian oil producers benefited recently from a narrower discount on heavy oil against the U.S. benchmark crude. The outlook for oil continues to look bleak, however, clouding prospects for a recovery as a sharp drop in Chinese stocks drag U.S. prices back under US$50 a barrel.
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Husky Energy’s production also edged higher in the second quarter with 337,000 barrels of oil produced per day, compared to 334,000 boepd a year ago.
The company said it expects approximately 85,000 barrels per day of new production to come online by the end of next year in its outlook report.
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“It’s becoming clear that we have a persistent supply demand imbalance in the oil market,” Asim Ghosh, Husky Energy’s chief executive officer said in a conference call with analysts. “I’m a member of the LL camp, the lower for longer camp.”
According to the news source, Husky Energy’s shares are higher by 5 per cent on the TSX.
[SOURCE: CBC News]
Drax advances biomass strategy with Pinnacle acquisition
The Group’s enlarged supply chain will have access to 4.9 million tonnes of operational capacity from 2022. Of this total, 2.9 million tonnes are available for Drax’s self-supply requirements in 2022, which will rise to 3.4 million tonnes in 2027.
The £424 million acquisition of the Canadian biomass pellet producer supports Drax' ambition to be carbon negative by 2030, using bioenergy with carbon capture and storage (BECCS) and will make a "significant contribution" in the UK cutting emissions by 78% by 2035 (click here).
This summer Drax will undertake maintenance on its CfD(2) biomass unit, including a high-pressure turbine upgrade to reduce maintenance costs and improve thermal efficiency, contributing to lower generation costs for Drax Power Station.
In March, Drax secured Capacity Market agreements for its hydro and pumped storage assets worth around £10 million for delivery October 2024-September 2025.
The limitations on BECCS are not technology but supply, with every gigatonne of CO2 stored per year requiring approximately 30-40 million hectares of BECCS feedstock, according to the Global CCS Institute. Nonetheless, BECCS should be seen as an essential complement to the required, wide-scale deployment of CCS to meet climate change targets, it concludes.