Foreign oil CEO urges Canada to offer more funding

International Petroleum Corp., the first foreign oil company to sanction a project in Canada’s oilsands in more than a decade, could add carbon capture and storage (CCS) to the plant if more government financial incentives become available, its CEO told Reuters.

Geneva-based IPC, part of Sweden’s Lundin Group, sanctioned Phase 1 of the 30,000 barrelper-day Blackrod thermal project in northern Alberta last month.

The company joins Canada’s biggest oil producers in urging policymakers to boost public funding for the costly technology that is seen as key to cutting emissions from the carbon-intensive oil sands.

Industry says CCS projects need more government support to be financially viable, while Ottawa and the oil-rich province of Alberta are at odds over who should provide increased funding.

“There’s still an opportunity — if we can have some sensible government decisions about getting serious about meeting climate targets — that if the right incentives come along, we’re in a very good position to look at carbon capture down the line,” CEO Mike Nicholson said in an interview in late February.

Until then, the company will pay Canada’s carbon tax, set to rise to $170 a tonne by 2030, Nicholson said.

IPC, a 50,000-barrelper-day producer with assets in Canada, France and Malaysia, will spend $850 million developing Phase 1 of Blackrod.

First oil is expected in 2026, and IPC has regulatory approval to produce up to 80,000 barrels per day.

The plant is the first greenfield oil sands project to be sanctioned since Imperial Oil Ltd. gave the go-ahead to its Aspen plant in 2018, only to shelve it indefinitely just months later.

It comes after years of tepid foreign investment in the oilsands, with international firms deterred by high up-front capital costs, crippling export pipeline congestion that has curtailed production and concerns about bitumen’s high carbon intensity.

Nicholson said IPC’S decision was underpinned by new Canadian export pipeline capacity and IPC’S own strong financial position.

The petroleum industry’s recent focus on paying down debt and buying back shares has also left global oil supplies extremely tight, he added.