Canadian oil sector edging forward

Despite working in a weak market, two companies -- Husky Energy and ConocoPhillips -- announced the start of new oil operations in Canadian oil sands.

Husky announced the start of operations at its Sunrise energy project in Alberta. Production began in April and the new phase of development should put the project closer to full capacity of 60,000 barrels of oil per day by the end of next year.

Data from the Canadian Association of Petroleum Producers show oil sand deposits, centered largely in Alberta province, hold an estimated 167 billion barrels of oil, the third largest reserves in the world.

Canada depends heavily on oil and natural gas for government revenue. With crude oil prices more than 50 percent below mid-2014 levels, the nation has teetered on the brink of recession.

Canadian oil and gas producer Penn West Petroleum said it would cut more than 400 jobs, or around 35 percent of its workforce, to endure a weak oil market. ConocoPhillips, which said it was cutting jobs from its Houston office, said it was nevertheless moving ahead with developments in the Canadian oil sector.

"The [Canadian] oil sands are an important part of our portfolio," Conoco Chairman and Chief Executive Officer Ryan Lance said in a statement.

Conoco said it delivered the first batch of oil from the second phase of the Surmont oil sands facility in Alberta. Production will ramp up slowly through the end of 2016, adding 118,000 barrels of oil per day in net capacity. Combined with phase 1, Surmont could max out at 150,000 bpd.

Statistics Canada, the government's statistics office, said real gross domestic product in Canada slipped 0.2 percent in May, the fifth straight month for declines and a sign the Canadian economy is moving into formal recession. The government agency said the trend reversed in June, with gross domestic product increasing by 0.5 percent.

"The increase in June was broad based, led by mining, quarrying, and oil and gas extraction," it said in its latest report.