Husky Energy’s quarterly report shows an over 50 per cent loss in profit company-wide, including the Lloydminster Heavy Oil Chain (LHOVC), since April after oil prices dropped in the spring.
The LHOVC includes the Lloydminster and Tucker thermal projects, enhanced oil recovery (EOR) assets, cold heavy oil production with sand (CHOPS), and the Lloydminster Upgrader and Asphalt Refinery.
The chain saw a profit of $5 million in the second quarter compared to $474 million in 2019.
Revenue fell 55 per cent totalling a $304 million net loss in the second quarter.
The Calgary-based company’s revenue is at $2.38 Billion, down from $5.24 billion in the second quarter of 2019.
Total equivalent production fell 7.8 per cent to 247,000 barrels per day (bpd), from 268,000 a year earlier.
CERO Rob Peabody said oil production and refining volumes are slowly returning to normal after cutbacks early this year.
Around 80,000 bpd of heavy oil was curtailed at the start of the quarter, but wasn’t utilized due to COVID-19 shutdowns impacting demand.
He said there are about 30,000 bpd of oil off-line but there are plans to bring it back as market conditions allow
“We are being cautious not to outstrip physical demand and continue to pace our throughput with our product liftings,” said Peabody.
“We expect the path forward to be bumpy, and we’ll continue to respond rapidly.”
The Lloydminster Upgrader was down 7,700 bpd compared to 73,400 bpd in the same period in 2019.
The report states the facility’s volume was reduced early in the quarter but increased as demand grew.
The Lloydminster Asphalt Refinery throughput was 28,200 bpd, compared to 26,100 bpd in the same period in 2019.
The refinery continued full operations during the quarter due to strong asphalt pricing.
Blended crude oil not processed through the Upgrader or Refinery averaged 86,600 bpd, compared to 100,700 bpd in Q2 2019.
In Lloydminster, the average sales for synthetic crude oil and refined products were 78,800 bpdy, compared to 84,100 bpd in the year-ago period.
Total LHOVC thermal bitumen production averaged 82,300 bpd, compared to 97,700 bpd in Q2 2019.
CHOPS and EOR crude production was 19,800 bpd, compared to 33,100 bpd in Q2 2019.
The six-week turnaround at the Lloydminster upgrader is still planned for the third quarter.