The Canadian energy sector was not spared by the COVID-19 pandemic. By the second quarter of 2020, demand for various energy products—including crude oil—had dropped, as government-enforced lockdowns and stay-at-home orders contributed to significant decreases in production and consumption. Because of this, the operating revenues and expenses of Canadian pipeline companies fell sharply in 2020.
Operating revenue and expenses fall in 2020
Operating revenues decreased by 17.9% to $13.3 billion in 2020, compared with a 5.6% rise in 2019. Meanwhile, total operating expenses dropped 24.1% to $8.4 billion in 2020, while they increased by 5.9% in 2019. By consequence, net revenue from operations was $4.9 billion, down 4.4% year over year. Net income after taxes was $3.0 billion (-29.0%).
These sharp declines were directly attributable to the pandemic and its impact on production activity and industrial prices.
According to data on supply and disposition of crude oil and equivalent, Canadian production of crude oil and equivalent products was down 4.9% in 2020, the largest annual decrease since 1999. In addition, exports of crude oil and equivalent products declined by 3.6%, compared with a 3.5% increase in 2019. The price of crude oil was also down 33.7% compared with 2019, according to the crude oil and bitumen price index.
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