Canadian oil sands producer MEG Energy Corp. reported a bigger-than-expected quarterly loss on March 7, as the company sold its bitumen crude at lower prices because of transportation bottlenecks.
Alberta oil producers have endured record discounts on benchmark Canadian heavy crude because of congestion on export pipelines that led to a glut of crude building up in storage tanks.
MEG, whose key operations are in the Athabasca oil sands region in Alberta, said bitumen production fell to 87,582 barrels per day (bbl/d) in the fourth quarter from 90,228 bbl/d a year earlier, while average realized prices for bitumen fell to C$13.90 per barrel from C$48.30.
Bitumen is a low-grade crude oil which is composed of complex, heavy hydrocarbons.
MEG estimates rail volumes to average 20,000 bbl/d in the first quarter, increasing to 30,000 bbl/d by the third quarter of 2019.
Adjusting for certain one-time items, the company posted a loss of 40 Canadian cents per share against expectations of a loss of 24 Canadian cents, according to IBES data from Refinitiv. (US$1 = C$1.34)
The province is now raising the limit because the amount of oil in storage is shrinking and prices are stronger, Alberta premier Rachel Notley said in a statement.
The Canadian province of Alberta will ease oil curtailments in February and March, earlier than expected, saying on Jan. 30 that its rare step to limit production had eased a glut of crude.
Canada holds the world's third-largest crude reserves but its energy industry has struggled to recover from the 2014/15 global oil price crash.