Husky offshore oil vessel SeaRose suspended after close call with iceberg<\/a><\/li>\n<\/ul>\nHusky bought the 50,000-barrels-per-day Superior Refinery last year for $435 million to process more of the company’s heavy oil production. It had been shut down for planned maintenance at the time of fire on Thursday.<\/p>\n
Western Canada Select, the Canadian heavy oil benchmark’s discount against the U.S. crude widened to US$17.40 per barrel, its highest level since the start of the month.<\/p>\n
Peabody also said he didn’t believe there was any connection between Thursday’s fire and other operational issues that have landed Husky in trouble with regulators in recent years, including a near-miss with an iceberg at a platform offshore Newfoundland and a large oil spill in Saskatchewan in 2016.<\/p>\n
Husky faces 10 charges from its pipeline spill in Saskatchewan.<\/p>\n
“The pipeline incident in Saskatchewan in Saskatchewan was one where the ground shifted and it caused the pipeline to fail, so I’d be surprised if there was any ground shifting involved in this one,” Peabody said. He also said the iceberg near miss in Newfoundland was a different series of events.<\/p>\n
The Canada-Newfoundland and Labrador Offshore Petroleum Board also reprimanded the company in January for not evacuating an offshore platform when an iceberg drifted too close to the facility last year.<\/p>\n
Thursday’s fire overshadowed the company’s financial results, which were less affected by large discounts for Canadian heavy oil than other domestic producers.<\/p>\n
“Husky remains the only heavy oil producer that we believe could be a (modest) net beneficiary from our expectation of persistently wide heavy oil differentials, owing to the company’s sizeable refining operations and pipeline capacity, providing excess downstream egress over and above the company’s heavy oil production,” Raymond James analyst Chris Cox said in a research note.<\/p>\n
Peabody said the company’s refineries helped “shield” it from the big discounts other Canadian producers face, which have been as wide as $30 per barrel at various points this year.<\/p>\n
“As we expand our heavy oil production, we will look for opportunities downstream,” Peabody said of potentially buying more refining capacity.<\/p>\n
Husky reported net earnings of $248 million for the first quarter on Thursday, up 249 per cent from the $71 million in net earnings the company recorded for the same period a year earlier.<\/p>\n
At the same time, the company’s oil and gas production dropped 10 per cent to 300,000 barrels of oil equivalent per day in the quarter from 334,000 barrels of oil equivalent per day last year.<\/p>\n
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