Cenovus Energy is the third-largest oil sands company in Canada by known reserves,19 holding major assets in conventional and unconventional oil in Alberta, as well as natural gas in Alberta and British Columbia (BC).
Cenovus has dramatically increased its stake in oil sands reserves in Western Canada at a time when major oil companies like ConocoPhillips, Shell and ExxonMobil have been selling off their shares in the region. With billions of dollars invested in extracting one of the most emissions-intensive fuels on the planet, Cenovus’s participation in climate policy arenas is cause for concern, making it one of our Top 50 emitters.
Head office: Calgary, Alberta
Countries of operation: Canada and the US
Revenue: C$17 billion20
Assets: C40.9 billion21
Reserves: 4,881,000,000 oil bbl, 652,000 gas MMcf22
Production: oil, natural gas liquids and oil sands: 360,704 bbl/d; natural gas: 659.000 MMcf/d; total: 470,490 boe/d23
Employees: 3,528 employees and contractors 24
Memberships and sponsorships: Advisory Council on Economic Growth, Canadian Business for Social Responsibility, Canada’s Oil Sands Innovation Alliance, Business Council of Canada, National Freight Transportation Association, Alberta Chamber of Resources, American Fuel & Petrochemical Manufacturers, Greater Vancouver Board of Trade, Pacific NorthWest Economic Region, Saskatchewan Chamber of Commerce, Calgary Economic Development, University of Alberta Research Chair in Energy and Environmental Systems Engineering, University of Calgary Chair in Canadian Plains Mitigation and Reclamation Research, C.D. Howe Institute, Canadian Council for Aboriginal Business, Business Council of British Columbia, Canadian Council of Chief Executives, Canadian Association of Petroleum Producers, Canadian Society for Unconventional Resources, Industrial Power Consumers Association of Alberta, Northeast Capital Industrial Association, Petroleum Technology Alliance Canada, Public Policy Forum, Resource Works, Society and the local Chambers of Commerce for Calgary, Bonnyville, Cold Lake, Lac La Biche, Medicine Hat and Drumheller25
Cenovus was formed on December 1, 2009, when Encana was split into two energy companies, Cenovus and Encana. Cenovus took over the oil assets.1 Seven years prior, in 2002, EnCana Corporation was formed through the merger of two Canadian oil and gas companies—PanCanadian Energy Corporation and Alberta Energy Company. These two companies provided Cenovus with many of its current holdings in the oil sands, and much of the company’s history can be traced back through them.2
In October 2006, Encana and ConocoPhillips announced their agreement to create an integrated North American heavy oil business composed of two 50/50 operating partnerships—one upstream and one downstream.3 The upstream partnership, based in Canada, was operated and managed by Encana, while the US-based downstream partnership was run by ConocoPhillips.
|Capital Group Co.||US||5.84|
|Letko, Brosseau & Associates||CA||3.24|
|First Eagle Investment Management LLC||US||2.59|
|Power Corporation of Canada||CA||2.54|
|Royal Bank of Canada||CA||2.30|
|Vanguard Group Inc.||US||2.24|
|Burgundy Asset Management Ltd.||CA||2.22|
|Canadian Imperial Bank of Commerce||CA||1.92|
|Pzena Investment Management LLC||US||1.72|
|Bank of Montreal||CA||1.69|
|Highfields Capital Management LP||US||1.27|
|TIAA Board of Overseers||US||1.00|
Includes all shareholdings of 1% and greater. Source: Orbis Database, October 2018.
The majority of Cenovus’s assets are held in Alberta’s oil sands, consisting of two producing operations called Foster Creek and Christina Lake. Both use the controversial “steam-assisted gravity drainage” (SAGD) method to extract oil. The company has also received regulatory approval for two additional projects that are still in development—Narrows Lake and Telephone Lake.4
Along the eastern slopes of the Rocky Mountains in northwestern Alberta and northeastern BC, Cenovus’s Deep Basin operation consists of both conventional oil and natural gas plays. Both the Deep Basin and Cenovus’s new oil sands projects listed above were previously owned through joint partnership with ConocoPhillips, but in 2017, a C$17.7 billion dollar deal placed each under Cenovus’s sole ownership.5
Cenovus also co-owns the Wood River Refinery in Illinois and the Borger Refinery in Texas through a joint partnership with ConocoPhillips. In 2017, the two refineries processed a combined average of 442,000 barrels of oil per day gross.6
Cenovus was hit hard by the multi-year drop in oil prices starting in 2014, and cut both its dividend and capital spending budget in response. In 2015, the company also laid off approximately 1,500 workers,7 and in 2016, it further reduced its workforce by approximately 440 staff.8
Like many Canadian oil companies, Cenovus maintains a contradictory position on climate change. Its former CEO, Brian Ferguson, frequently commented on the longevity of the oil industry, even as the company simultaneously promoted a “green growth” policy strategy to address climate change that emphasized the role of technological solutions to reduce emissions intensity in its operations.
In May 2016, speaking to the Canadian Club in Toronto, Ferguson said it would be “illogical” for Canada “to completely leapfrog over oil,” because it is such a “fantastic” energy source. He voiced the company’s goal to produce oil that generates lower emissions in the production process, stating, “I absolutely believe that hydrocarbons can be part of a low-carbon future.” Ferguson also noted that the industry had “basically solved” other environmental issues related to land, water and tailings, leaving it to focus now on the issue of greenhouse gas emissions.9
Ferguson also backed Premier Rachel Notley’s climate plan and economy-wide carbon tax as the most efficient way to reduce emissions, and he was one of a group of oil executives to appear on stage with Notley when the announcement was made. Two years later, he stated that Cenovus’s decision to invest billions more in Alberta’s oil sands was based in large part on the province’s carbon-pricing policies.10 Ferguson has been a vocal promoter of pipelines and has actively lobbied the federal government for the Trans Mountain, Energy East and Keystone XL projects in particular.11 In 2016, Ferguson was appointed to Prime Minister Justin Trudeau’s Economic Advisory Council. The group was appointed to work closely with the prime minister and Finance Minister Bill Morneau to prepare a long-term economic strategy for the country following the 2016 budget.12
In order to support its carbon-heavy business model, Cenovus looks for opportunities to reduce the rate of emissions intensity per unit of fuel produced—subsequently avoiding climate policies that address total emissions produced. It emphasizes its attempts to increase cogeneration technology and to reduce the amount of water used for its in situ extraction (SAGD) operations. In January 2016, Cenovus and Suncor, in collaboration with BC Cleantech CEO Alliance, announced that they would direct C$100 million towards establishing Vancouver-based company Evok Innovations, a venture capital fund linking cleantech firms with fossil fuel companies, with the goal of reducing greenhouse gas emissions intensity and corporate operating costs.13 Cenovus publicly supports carbon pricing schemes, contingent on the requirement that revenues from all taxes should be directed toward technology that could be used by industry to reduce operational emissions.14 The company is also a member of Canada’s Oil Sands Innovation Alliance—an organization spearheading carbon capture and storage (CCS) research—and it launched one of the largest CCS projects in the world at its former Weyburn facility in Saskatchewan. Launched in 2000, the project injects 3 Mtpa (million tonnes per annum) underground.15 Cenovus sold its assets in the Weyburn facility to Whitecap Resources in 2017.16
In 2011, a couple living near Cenovus’s Weyburn CCS facility claimed that algal blooms, dead animals and foaming groundwater had begun to appear on their property. A commissioned study found carbon dioxide concentrations in the surrounding soil several times higher than those typically found in field soils.17 The incident’s link to CCS has been contested, but no conclusive evidence has proved or refuted the claims.18
Learn more about Cenovus Energy at LittleSis.org
The intent of the Corporate Mapping Project database is to engage Canadians in a conversation about the role of the fossil fuel sector in our democracy, by “mapping” how power and influence play out in the oil, gas and coal industries of BC, Alberta and Saskatchewan.
Canadian Press, “Cenovus Energy Eyes 500 to 700 Staff Cuts as It Adopts Lower 2018 Spending Plan,” CBC News, December 14, 2017, https://www.cbc.ca/news/canada/calgary/cenovus-calgary-workforce-cuts-costs-energy-conocophillips-1.4447990.
Cenovus Energy, 2017 Annual Report, https://www.cenovus.com/invest/docs/2017/annual-report-2017.pdf.