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Cenovus closes transaction to combine with Husky

January 29/2021

MOSCOW (MRC) -- Cenovus Energy Inc. is pleased to announce that its strategic combination with Husky Energy Inc. has closed, according to Hydrocarbonprocessing.

With the close of the transaction, Husky has become a wholly owned subsidiary of Cenovus and will remain as such until completion of a planned amalgamation among the two entities. Upon amalgamation, Cenovus will become the obligor under Huskys existing long-term notes and other direct obligations. The combined company will continue to be headquartered in Calgary.

This is an exciting day for Cenovus as we become a leaner, stronger, more fully integrated oil and natural gas company that is exceptionally well-positioned to weather the current environment and be an energy leader in the years ahead, said Alex Pourbaix, Cenovus President & Chief Executive Officer. With the closing of this transaction, we will focus on safely and efficiently integrating the assets and teams of these two great companies while working to realize the USD1.2 billion in synergies weve identified. These cost and capital efficiencies, combined with our strong portfolio of well-matched upstream production, midstream and downstream assets as well as improved financial strength, are expected to generate strong value for our shareholders.

The combination creates Canadas third largest crude oil and natural gas producer, based on total company production, with about 750,000 barrels of oil equivalent per day of low-cost oil and natural gas production. Cenovus is also now the second largest Canadian-based refiner and upgrader, with total North American upgrading and refining capacity of approximately 660,000 barrels per day bpd. In addition, the company has access to about 265,000 bpd of current takeaway capacity from Alberta on existing major pipelines, 305,000 bpd of committed capacity on planned pipelines and 16 million barrels of crude oil storage capacity as well as strategic crude-by-rail assets that provide takeaway optionality.

The commitments both Cenovus and Husky have made to world-class safety performance and ESG leadership will remain core to the combined company. This includes an ongoing commitment to transparent performance reporting, an ambition to achieve net zero emissions by 2050 and a plan to set ambitious new ESG targets for the combined company later this year.

I want to thank and congratulate everyone at Cenovus and Husky for their dedication and hard work in bringing this transaction to a successful conclusion, Pourbaix said. This is truly one of the most significant developments in the history of our two companies, and in the history of the Canadian energy industry, for that matter.

Cenovus expects to provide additional details on its future plans with the release of its 2021 capital budget and updated corporate guidance in late January. Fourth quarter and year-end financial and operating results for both Cenovus and Husky Energy are scheduled for release in mid-February.

As MRC reported earlier, Canadian oil and gas producer Husky Energy resumed production at its catalytic reformeri n Lima, Ohio, USA, on 15 September, 2020, after an unplanned shutdown. The company shut its production with a capacity of 115,000 mt/year of benzene and 330,000 mt/year of of toluene on 14 September, 2020.

Benzene is a feedstock for the production of styrene monomer (SM), which, in its turn, is a feedstock for manufacturing polystyrene (PS).

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 520,630 tonnes in 2020, which corresponded to the same figure a year earlier. December estimated consumption of PS and styrene plastics in the country grew by 5% year on year to 47,490 tonnes.
Author:Margaret Volkova
Tags:North America, PS, benzene, crude and gaz condensate, styrene, gas processing, petrochemistry, Husky, Canada, Russia, USA.
Category:General News
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