ibusinesslines.com December 17, 2018

Sask. not following Alberta in cutting oil production

06 December 2018, 09:41 | Kelvin Horton

9:26am Oil tanker rail cars in Regina sit on the city's central tracks on Nov. 19 2018. Evan Radford/980 CJME


Oil tanker rail cars in Regina sit on the city's central tracks on Nov. 19 2018. Evan Radford/980 CJME

There will be an exemption for the first 10,000 barrels of oil produced, a measure that is meant to protect some smaller companies working in the province. WCS's discount to futures fell to $50 a barrel in October amid refinery maintenance in the U.S. Midwest. Bloomberg reported that the benchmark for heavy oil, Western Canadian Select, jumped to $43.40 (CAD) a barrel, from $14.48. This is especially true if companies with their own US refining capacity, like Husky Energy Inc., Imperial Oil Ltd. and Suncor Energy Inc., decide to squeeze their own workers till the pips squeak to punish the government for reducing their profit expectations for the greater good.

The Trans Mountain expansion project, which would triple capacity to the B.C. coast, is now in legal limbo despite being approved two years ago as Ottawa revisits the impacts on First Nations and B.C.'s marine environment.

Alberta Premier Rachel Notley has announced a temporary 8.7 per cent cut, or decrease of 325,000 barrels a day, in the production of raw crude oil and bitumen starting Jan 1, 2019. Crude by rail will narrow the differential, but not as much as pipelines.

Moe said that while he agrees there is an unacceptably high differential for Alberta oil, "a government-mandated production cut in Saskatchewan could result in a loss of jobs and economic activity in our province, but would have little impact on the price of oil because it would disproportionately impact conventional oil production, which is not the problem". The government said the reduction will be evaluated monthly.

"What we now have is a serious glut in oil, which can't be resolved until OPEC gets together on Thursday and decides to cut back along with Russian Federation and a few other producing nations".

The top 20 producers account for the vast majority of Saskatchewan's oil production, totalling 441,717 bbls/d in aggregate.

Western Canadian Select, the main oil sands grade, may average about $20/bbl below West Texas Intermediate for most of next year, about equal to the cost of rail transport, said Wood Mackenzie's Oberstoetter, lead analyst for Canadian upstream research.

Jackie Forrest, senior director at the ARC Energy Research Institute in Calgary, said some companies should have invested in rail capacity sooner in order to ease pipeline shortages.

"It shows that our regulatory system is broken and that we should have never have come to this", said chamber president, Sarah MacKenzie.

The Canadian Dollar rose broadly Monday as oil prices recovered from 2018 lows but developments in the domestic market have just dented the growth outlook and could have negative consequences for the currency over the coming months.

"Pipelines only solve one component of this", Traya said.

He said Notley's decision was courageous given the lack of consensus among industry players over whether the province should intervene.

Notley said Prime Minister Justin Trudeau's government must do its part by rolling back proposed legislation that she says will make it much harder for energy megaprojects to be approved.

He lauded the province's market intervention, calling it a necessary step. Once excess storage is drawn down, the production cut will drop to roughly 95,000 barrels daily through the end of 2019.

The premier announced the cut on Sunday. "I was at her Christmas party on Sunday night so we had a good chance to chat about it".

Other News

Trending Now

Hindustan Unilever to merge with GSK Consumer Healthcare
As per a definite agreement reached by HUL with GSK CH India, 4.39 shares of HUL will be allotted for every share in GSK CH India. The transaction includes acquisition of 82 per cent in GSK Bangladesh and other commercial operations and assets outside India.

Hootie and the Blowfish will make Cleveland stop on new tour
They released their freshman Cracked Rear View album in 1994, which sold more than 21 million copies worldwide. As such, Citi cardmembers will have access to purchase presale tickets beginning Monday, 3 December at 10 a.m.

New AirPods 2 May Arrive Early Next Year
He also calls the product the most popular accessory in the line of Apple, which buys even more than the iPhone. He estimates that shipments of the device will hit 100 million units by 2021, up from 16 million past year .

David Attenborough: Civilisation is on the brink of collapse
They aim to establish rules, figure out financing and build ways to verify that nations are meeting their commitments. In the weeks leading up to the event, the United Nations asked people to send their thoughts on climate change.

Soros-founded university says 'forced out of Budapest'
CEU was founded in 1991 by Hungarian-American philanthropist and financier George Soros , a strong critic of the Orbán government. Ignatieff said while CEU had "a pretty good (legal) case" at those courts, he would not speculate about their outcomes.

Worldwide magazine removes hateful article on Priyanka, apologizes
As empirical evidence of the above, the writer cited Tom Hiddleston, with whom Priyanka Chopra co-presented an Emmy award. Some have also said that the article is a result of jealousy and also spewing hatred against brown skin and Indian women.

Tom Brady jokes about retiring after hitting major rushing milestone
ESPN Stats & Information reckoned that heading into Sunday's game Brady had lost 160 rushing yards to kneel-downs since 2006. Brady's run came on a third-and-3 play, and he slid at the end of it before signaling first down from the ground.