Threatened US tariffs targeting Canadian imports have both "pluses and minuses" for US independent producer ConocoPhillips which has production on both sides of the northern border.
The company's primary exposure to tariffs would center upon sales from its Surmont oil sands operations in Alberta, Canada, into the US.
"We sell around half of our Surmont liquids into the US on a mix of pipeline and rail," said Andy O'Brien, ConocoPhillips senior vice president for strategy, commercial, sustainability and technology. "But the remainder is actually transported to the Canadian West coast or sold in the local Alberta market."
If tariffs were to be implemented, it is "pretty difficult" to say exactly who would carry the burden -- producers or buyers -- he added.
"The refiners in the Midwest and the Rockies have less options to substitute versus, say, the Gulf coast or the west coast refiners," O'Brien said.
The company's diversified portfolio would also help shelter it from some exposure. "If we were to see tariffs, we'd likely see strengthening differentials for Bakken, for [Alaska North Slope crude] and possibly even the Permian," said O'Brien. "So lots of moving parts."
Like others in the oil industry, ConocoPhillips is looking at the potential to supply power to cater to the boom in AI data centers.
"It's got to be competitive for capital, but it certainly looks like some growth opportunities potentially coming, and we're assessing some of those opportunities right now," chief executive officer Ryan Lance told analysts after posting fourth quarter results.
Although the Trump administration has called on domestic producers to step up output, Lance said his priority was to drive further efficiencies in operations.
"A lot of our focus and attention right now is on permitting reform," Lance said, and the need to build out energy infrastructure.
Drilling approvals, rights of ways, and permits on federal land all slowed under the administration of former-president Joe Biden and there is an opportunity now to get back on track.
"That just adds to the overall efficiency of the system and should lead to a more sustained plateau or growth in our production coming out of the Lower 48 in terms of liquids and certainly the growing amount of gas volumes that are coming as well," Lance said. "So it just creates a better environment for investment and more efficient operations."
Full-year 2025 output at ConocoPhillips is seen in the range of 2.34mn-2.38mn b/d of oil equivalent (boe/d), which includes 20,000 boe/d of planned turnarounds.
Fourth quarter 2024 profit fell to $2.3bn from $3bn in the final three months of 2023, as higher volumes were more than offset by acquisition-related expenses and lower prices.
Averaged realized prices fell 10pc to $52.37/boe from the fourth quarter of 2023.
Fourth quarter output of 2.18mn boe/d represented an increase of 281,000 boe/d from the same quarter of the previous year. After adjusting for acquisitions and dispositions, output grew by 6pc.
As part of a $2bn divestment goal, ConocoPhillips has signed agreements to sell non-core Lower 48 assets for $600mn. They are expected to close in the first half of the year.
