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Canadian Natural Resources Ltd CNQ-T on Wednesday forecast increased production for 2023, as it seeks to capitalize on higher oil and gas prices and set a new environmental target.

Demand for oil and gas surged following sanctions on Russia after it invaded Ukraine, as Europe scrambles to replace gas from Russia and improve long-term energy security.

Calgary, Alberta-based Canadian Natural, Canada’s biggest oil producer, said it expects total 2023 production to be 4% higher than this year and it expects to eventually return more money to shareholders.

The company said it will continue to allocate 50% of free cash flow to share buybacks for now and will raise shareholder returns to 80%-100% once it reduces net debt to C$8 billion from its 2022 year-end target of C$10 billion.

Canadian Natural will likely reach C$8 billion in the fourth quarter next year, TD Securities analyst Menno Hulshof said in a note.

Canadian oil sands producers generating billions in free cash flow have come under pressure to spend more to help meet the country’s emissions reduction goals.

For the first time, Canadian Natural set a target to reduce its own overall greenhouse gas emissions. The company aims for a 40% reduction from 2020 levels in emissions from its operations and purchased energy by 2035, adding to a previous goal to cut methane emissions.

The company expects to spend C$5.2 billion ($3.84 billion) next year, compared with C$4.9 billion this year.

It forecast total 2023 production of between 1.33 million and 1.37 million barrels of oil equivalent per day, the mid-point of which was in-line with Street expectations.

Canadian Natural shares rose 0.3% in Toronto, while stocks of its three biggest Canadian peers declined.

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