Husky Energy Inc. is considering the sale of part of its midstream business and will cut capital spending – particularly in Alberta – in 2016 to make itself more resilient in a low oil price environment.
Reports suggest that Husky Energy Inc. is putting pipeline and storage assets in its Lloydminster heavy oil region for sale to pay debt, and is committing to spend future capital only on new projects that will break even at US$30 per barrel oil prices.
The integrated major announced Tuesday a US$2.9 billion to US$3.1 billion capital spending plan for 2016, roughly equal to what it is spending this year.
On a conference call, Chief Executive Asim Ghosh said Husky’s price assumption over the next two years is US$/bbl for benchmark West Texas Intermediate oil and US$3/1000 ft3 for Alberta gas.
Husky said it will look at the potential partial sale of midstream assets.
Ghosh says he is strengthening the company to succeed in a post-OPEC world.
Husky, majority owned by Hong Kong billionaire Li Ka-Shing, is holding back spending in Alberta, where the new NDP government has raised corporate taxes, is implementing a controversial carbon tax and is expected to reveal a new oil and gas royalty regime by the end of the month.
Edited from various sources by Elizabeth Corner
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