CEO Brian Ferguson of Cenovus prepares his speech before the company's annual general meeting in Calgary, Alberta, April 30, 2014. The energy company is opening an oil-trading operation in Houston to expand efforts to bring its oil to the Gulf Coast.TODD KOROL/Reuters
Cenovus Energy Inc. is opening a new oil-trading office in Houston as the oil sands producer seeks to squeeze every penny out of deeply discounted barrels.
Cenovus is in the process of hiring five staff in the Texas energy hub to start the new trading desk by the end of the year.
The strategy is to cultivate market intelligence and relationships as the company expands efforts to get more of its crude to the U.S. Gulf Coast, the continent's largest heavy-oil refining region, spokesman Brett Harris said.
"That's already a key market for us with lots of potential growth," Mr. Harris said. "It's part of our market-access strategy, which is to make sure you're getting optimal pricing for every barrel of oil you can."
The operation will buy and sell crude, as well as purchase diluent, the light hydrocarbons that are blended with tar-like bitumen so it can flow through pipelines, he said.
The new trading operation in Houston follows other moves the company has made to try to capture richer margins for its oil, whose pricing has taken a major hit in the past year along with that of benchmark light oil.
In June, Cenovus paid $75-million for a rail-loading terminal in Alberta. The facility, northeast of Edmonton, is connected by pipeline to its Foster Creek oil sands project. It also launched a marine-tanker strategy to get more of its crude to Asian markets from the West Coast.
Cenovus already trades crude in Texas, but has not had a physical presence there.
"We want to be there in a bigger way," Mr. Harris said. "If you're in the market and have people who know the market, then you're going to have better relationships down there."
Jeffrey Jones