Published: Пн, Декабря 03, 2018
Finance | By Loren Pratt

Alberta government imposes oil production cuts for province

Alberta government imposes oil production cuts for province

The action is created to prevent job cuts by letting companies keep people on because they can "see a light at the end of the tunnel", Notley said at a news conference.

However, he says we should turn our eyes to the world stage.

That figure is expected to shrink as the glut of oil in storage is reduced.

The province says the price gap is costing Canada more than $80 million per day and is caused by the inability to build pipelines.

The reduction amounts to 325,000 barrels a day of raw crude and bitumen, or about 8.7 per cent of daily production.

Shares in oilsands companies most likely to benefit from Alberta's move to curtail crude production starting January 1 are soaring in the wake of Sunday's announcement by Premier Rachel Notley.

Reaction to the curtailment from United Conservative Party leader Jason Kenney and Alberta Party leader Stephen Mandel was swift.

But he said Notley's government has played a role in creating the problem by not pushing back as the federal government cancelled the Northern Gateway pipeline to B.C. and introduced legislation that industry leaders say will make it more hard to get oil megaprojects approved.

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Notley said the government has a duty to protect resources as they are owned by every Albertan.

Its shares were up slightly Monday as it issued a statement saying its estimate of the impact of the provincial cuts will be provided when it issues its 2019 capital and production guidance.

There will be a 10,000-barrel-per-day exemption to ensure small producers are not hurt disproportionately.

The price differential for Western Canadian Select (WCS) versus West Texas Intermediate (WTI) has been around $30 to $50 US recently, peaking at $52 in October.

"Ottawa's failure in this area has left Alberta's energy producers with few options to move their products, resulting in serious risks for the energy industry and Alberta jobs", reads a release from the province. "But we think this is a good way to allow for that flexibility that's needed and that exists within the industry to accommodate these changes", she said.

The move is not unprecedented - in 1980, Tory premier Peter Lougheed forced oil production cuts to protest the federal Liberals' national energy program.

Meanwhile, Suncor Energy Inc.(SU.TO) said that it also would have preferred to avoid government intervention. She earlier stressed that now Alberta's resources are given away "for next to nothing", referring to the province's crude selling for around $15 a barrel. But she has said that rail cars, new pipelines and increasing domestic refining capacity would not bring relief soon enough.

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