Brad Corson: Yeah, thanks for the question. And I mean you’re right, it’s not something we maybe normally talk about or get questions on, but it’s not off the board for us, because we take water consumption very seriously in all of our operations. We have a long history of continuing to reduce water consumption, and so that’s a priority for us. In fact, when you look at both Kearl and Cold Lake, our two primary water users, those teams have made exceptional progress towards reducing water usage in the range of 30% to 40% reductions since 2020, and that comes through the result of increased recycling, as well as reduced consumption and so I’m quite pleased with that. I think, as we look to risk of drought and impacts that has on water supply, we’re going to continue to have to manage that carefully.
For Kearl, our primary source of water, of course is the Athabasca River. We have agreements in place for the implications of reduced water availability and how we manage that. And similarly with Cold Lake, which is the source, primary source of our water for our Cold Lake operations. We have agreements in place there for low water levels. And so I have no concerns with respect to our operations, but it is something we manage quite carefully and something we’re very diligent about. And obviously, more broadly, we want to make sure we are contributing in a positive way to sustainability, when it comes to water use, especially in drought conditions.
Patrick O’Rourke : Okay, great. And then my second question here, there’s no sort of formal update on Pathways in the release, although you did touch on it a little bit. Are you able to provide a bit of an update on the project where you stand here? Because I think from yourselves and some of the partners, there had been discussion about, especially with the long lead items being on pretty short cycle in terms of timeframes, in terms of meeting decisions in order to get the project on and meet some of the 2030 timeframes that have been in place.
Brad Corson : Yeah, thanks. Thanks for the question. I’m glad I have an opportunity to comment on Pathways, because there is a lot of activity underway, and it often doesn’t get publicized, doesn’t get maybe external recognition, but maybe just summarize it a bit. I would characterize this as two main kind of streams of work activity. The first is kind of the ongoing engagement with the government, both federal and provincial, regarding all of the fiscal support and regulatory certainty that is required to underpin these significant investments and so those discussions continue. You’re obviously aware of the 50% investment tax credit offered by the federal government. More recently, the Alberta province has announced a 12% support for projects like this.
And there’s – the discussions are continuing around further support that’s needed and all the details that go around that. But equally important is another big work stream around progressing the physical aspects of the project. So there’s significant engineering and design work underway, both regarding the main pipeline, as well as individual companies are working on their own capture projects, which all will feed into that pipeline. We’re working on environmental field work and studies that are integral to the permitting of the pipeline. There’s significant community engagement and indigenous consultation underway. The front end engineering and design, the feed work, as we refer to it, for the 400 kilometer CO2 pipeline is now more than 50% complete.
That positions us to ultimately order the line pipe, once we have all the fiscal support in place from the government. And we’re also working on a major kind of regulatory application related to kind of the whole CO2 transportation network, but also the storage hub, and that’s an important part of this project as well, so a lot of activities underway. Our Pathways team, including the CEOs are meeting on a weekly basis. Several aspects of the project, they are meeting multiple times a week on it. So we’re making progress, and all of this is consistent with a multi-year project of unprecedented scale. So these things take time, but we’re intensely focused on delivering this project, which is a key enabler to achieving net zero by 2050. And all of our member companies have their own interim targets for Imperial, in addition to net zero.
We’ve also announced a target of 30% reduction in greenhouse gas intensity for our oil sands by 2030. So we’re all focused on those interim targets as well. So thanks for that question and really kind of a shout out to the Pathways team that is doing a lot of work in this space.
Patrick O’Rourke : Okay, great. Thanks very much.
Operator: Your next question comes from the line of Neil Mehta with Goldman Sachs. Please go ahead.
Neil Mehta: Yeah. I’d add my congrats on the dividend bump and the strong results as well. I guess Brad, maybe I want to talk to you about the return of capital via the SIB. You’ve been pretty consistent about doing that over the last couple of years when you have excess cash. Just how are you thinking about the timing of that? And based on what we see in the forward curve, is it fair to assume that’s more likely a back half event than a front half event?
Brad Corson : Yeah, thanks. Thanks for the question. As we’ve talked on many calls and other occasions, returning surplus cash to our shareholders is core to our strategy. It’s a key priority for us. And that return of cash starts with the dividend and ensuring that that is not just reliable, but also growing. And obviously you’ve seen the decision we’ve taken on that today. And then, historically, we have turned next to the NCIB. But of course, for that we’re limited to 5% per year share buybacks. But we do see that as a very efficient and advantaged way to return cash to shareholders. So that’s why that has been kind of our next go-to and we’ve done NCIBs consistently for many years now. And then of course, in the last couple of years, we’ve had further surplus cash beyond what’s needed to support the dividend program and the NCIB program.
So we’ve turned to SIBs. The decision on timing for the SIB and magnitude of the SIB in the past has been very much driven by both of our actual and projected cash flows, as well as where we are with the NCIB. Because again, we have to do – we want to do that preferentially, and we can’t be doing them both at the same time. And then on top of that, to execute an SIB, there are prescriptive blackout periods that we have to work around. So all of those things factor into our decision as to when we will do – when and if we will do an SIB. So I’m not going to forecast at this point, the timing of a future SIB. But we’ll be looking at all those factors. We’ll be reviewing those with the board on a quarterly basis, and we’ll certainly be continuing to discuss the status of those plans with the market.
And maybe I’ll just see if Dan has anything else to add to that.
Dan Lyons : No. Well said, Brad. And of course Neil, it really depends on prices, right. Commodity prices, we assume will have continued strong operations. So whether we have surplus cash, above and beyond the NCIB is going to be driven by commodity prices primarily. So to the extent we generate surplus cash, our commitment is to return it to shareholders in a timely way. So we’ll just have to see how things play out over the year. I think that’s where we’re at.
