Athabasca Oil says it will greenlight carbon capture project in the oilsands next year

Intermediate producer Athabasca Oil Corp. could be poised to lap its much larger oilsands peers in deploying carbon capture and storage technology to cut emissions, after an announcement Wednesday.

The Calgary-based firm said it will partner with clean tech firm Entropy Inc. to build a carbon capture and storage (CCS) project at its Leismer oilsands site. Athabasca hopes to increase production at this site by about 30 per cent by 2024, and a final investment decision is expected next year.

The company is aiming for a 30 per cent reduction in greenhouse gas emissions intensity by 2025, based on 2015 levels.

The Pathways Alliance, a consortium of six of the largest oilsands firms in the sector, proposed a massive carbon capture storage hub and pipeline in 2021 — but member companies have yet to sanction the $16.5-billion project despite Ottawa’s announcement last April of a 50 per cent investment tax credit for carbon capture storage and utilization projects.

Pathways Alliance members have since said they’re seeking more certainty from governments around carbon pricing and the rules around carbon credits and credit markets.

In its 2023 outlook, Athabasca announced a $145-million capital program focused on its thermal oil assets, up approximately 13 per cent from the $128 million the company budgeted for this year.

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The company said it expects to maintain production next year at around 34,500 to 36,000 barrels of oil equivalent per day (boe/d) with further growth materializing in 2024 as maintenance and upgrading projects come on-stream.

Athabasca, which struggled to obtain credit in order to survive when oil prices crashed in 2020 as a result of the pandemic, said Wednesday that it had achieved its debt target ahead of expectations and expected to be in a net cash position in the first quarter of 2023.

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