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CALGARY — Canadian Natural Resources Ltd. is moving ahead with early engineering work on two steam-driven oilsands projects, but an $8.25-billion mine expansion remains on hold until questions around government environmental policies are resolved.
The Calgary-based oil and gas giant said Thursday that it is progressing front-end engineering work this year on a pair of medium-term growth projects: the 30,000 barrel-per-day Jackfish expansion and the 70,000 barrel-per-day Pike 2 project. Canadian Natural is also working on procuring equipment for its thermal oilsands growth strategy.
“Our ability to effectively allocate capital across our strong asset base provides us with a unique competitive advantage,” president Scott Stauth told analysts on a conference call to discuss first-quarter results.
In March, Canadian Natural said spending that had been earmarked for the Jackpine mine expansion north of Fort McMurray, Alta., would be put on ice. At the time, it said uncertainty around carbon pricing and methane emissions rules had created an “economic burden for long-term growth investments.”
Alberta and Ottawa signed a sweeping energy accord late last year. The two governments have reached an “agreement in principle” on the regulation of methane, a potent greenhouse gas, but the implementation details are still being worked out.
The memorandum of understanding also called for the effective carbon price in Alberta to be increased to a minimum of $130 per tonne. The two governments are wrangling over the pace of the increase more than a month past their self-imposed April 1 deadline to nail down the details. Alberta’s current industrial carbon price is $95, but credits trade for far lower.
The Oil Sands Alliance, a coalition of producers that includes Canadian Natural, said in a statement earlier this week that the “pace of change has been slow” since the MOU was signed in November, and Canada is at risk of letting an opportunity to become a “true energy superpower” pass it by.
Among other things, the group takes aim at the “uncompetitive industrial carbon tax.”
An analysis from the Canadian Climate Institute has pegged the per-barrel hit from the increase at an average of 50 cents. Canadian Natural’s oil sands mining and upgrading operating costs for the first quarter averaged $23.73 per barrel of the light crude derived from the oilsands upgrading process, known as synthetic crude oil.
“We are committed to work together with the provincial and federal governments with the goal of achieving a fiscal competitive MOU framework that will attract capital investment to grow the oilsands,” Stauth said on the call.
“We have a good chance of achieving this if we are competitive, which means investment dollars must return value that is better than investment alternatives in other countries.”
The element in the MOU that has perhaps garnered the most attention is a path forward for a new bitumen pipeline to the West Coast, to be built in tandem with a massive carbon capture and storage project planned for Alberta by the Oil Sands Alliance, formerly the Pathways Alliance.
Stauth said the outlook has improved for oilsands producers’ ability to get their crude to market in the medium term.
Enbridge Inc., which reports its earnings Friday, is expanding its cross-border network. Meanwhile, South Bow Corp., whose quarterly report is set to be released later Thursday, is looking at its own U.S.-bound project that would make use of some of the infrastructure from the defunct Keystone XL proposal.
Trans Mountain, currently the only meaningful outlet Canadian companies have to get crude to Asia via the B.C. Lower Mainland, is looking at expanding capacity.
“All of them are positive for this medium-term growth that will help the industry here grow,” Stauth said of those projects.
A second pipeline to the West Coast, which could carry up to a million barrels of oil per day, is needed to “grow oilsands in a significant way” in the long-term, Stauth said.
The Alberta government is leading early regulatory work on the new proposed B.C. pipeline with the help of industry advisers. The hope is for a private sector builder to take it over eventually, but so far none have expressed interest.
Earlier Thursday, Canadian Natural reported a first-quarter profit of $1.35 billion compared with $2.46 billion in the same quarter last year. That amounted to 64 cents per diluted share for the quarter ended March 31 compared with $1.17 per diluted share a year earlier.
On an adjusted basis, Canadian Natural says it earned $1.17 per diluted share in its latest quarter, up from an adjusted profit of $1.16 per diluted share in the first quarter of 2025.
Analysts on average had expected Canadian Natural to report an adjusted profit of $1.01 per share, according to LSEG Data & Analytics.
Product sales for the quarter totalled $12.40 billion, down from $12.71 billion a year earlier.
Production averaged 1,643,160 barrels of oil equivalent per day for the quarter, up from 1,582,348 boepd a year ago.
This report by The Canadian Press was first published May 7, 2026.
Companies in this story: (TSX:CNQ)
Lauren Krugel, The Canadian Press
