Canadian Natural Resources Ltd. expects the nation's crude export bottlenecks to ease in the coming months as producers lift crude-by-rail shipments and incremental pipeline capacity becomes available.

Describing the regulatory and legal challenges that have dogged expansion of export capacity in recent years as "a cloud hanging over Canada's oil and gas industry," Executive Vice Chairman Steve Laut said the Calgary, Alberta-based company is optimistic the sector is nearing the end of those hurdles. Rail shipments, which are expected to reach 500,000 barrels per day this year, and TC Energy Corporation's offering of an additional 50,000 bbl/d on its Keystone pipeline system are among "some of the positives out there," he said.

"What I see ahead of us is there are many projects that have been announced, many optimization projects that are looking to go ahead," Laut said on an Aug. 1 conference call. "We see pipeline egress happening, it's happening differently than obviously we originally envisioned a year ago. We're very confident the pipelines will go forward and how that unravels is getting less and less blurry as each hurdle is being overcome."

Canadian Natural, Canada's largest oil company by volume, saw its output tick downward to 1 million barrels of oil equivalent daily in the second quarter from 1.1 million boe/d a year earlier as production caps in its home province of Alberta hit its oil sands operations in the province. Despite initial optimism that the curtailment — which was put in place to relieve pressure on the export pipeline network — would end ahead of schedule, the company now believes the cuts will continue through the remainder of 2019.

Laut said Canadian Natural is looking at crude-by-rail contracts the provincial government wants to offload. Some companies have sought to link the transfer of the government-held contracts to increases in the production cap.

Alberta's government "is going through a process here that's to conclude here later in August on their crude by rail contracts," Laut said. "Currently we're in the process, we're walking through that piece today. To go forward with it obviously it has to make economic sense, but we're in the process and we're looking at it."

Laut touted Canadian Natural's environmental progress, pointing out that the company has reduced its overall emissions by 29% since 2012, and greenhouse gas releases from its Horizon oil sands project have dropped 37% in the same period. It also participates in a carbon capture and sequestration project near Edmonton, Alberta, which Laut said makes Canadian Natural the fifth-largest user of the technology in the world. Canadian Natural is one of three oil sands producers that started an advertising campaign in newspapers Aug. 1 promoting the benefits of the energy industry ahead of a Canadian federal election that is scheduled for October.

Separately on Aug. 1 Canadian Natural reported second-quarter adjusted net earnings from operations of C$1.04 billion, or 87 Canadian cents per share, down from C$1.28 billion, or C$1.04 per share, in the year-ago period. The S&P Global Market Intelligence consensus normalized EPS estimate for the second quarter was 87 Canadian cents.