OTTAWA (Reuters) – Canada and the G20 countries agreed on the need for stability in oil prices, but at a meeting Friday Canada did not promise a reduction in special production, Natural Resources Minister Seamus O’Regan said on Friday.
FILE PHOTOS: Canadian Minister of Natural Resources Seamus O’Regan speaks during the Question Period at the House of Commons on Parliament Hill in Ottawa, Ontario, Canada 10 December 2019. REUTERS / Blair Gable / Photo File
The minister also said that the federal government would send aid packages to provide liquidity to the country’s oil and gas sector which is experiencing difficulties “immediately.”
Major oil nations pushed on Friday to finalize an agreement to cut oil at the G20 teleconference, in which O’Regan participated, to lift prices slammed by the coronavirus crisis, with Russia and Saudi Arabia taking the largest share and the United States showing unusual willingness to help.
Riyadh, Moscow and its allies, which is the informal OPEC + group, have made an agreement to curb crude oil production with the equivalent of 10% of global supply in marathon talks on Thursday, and said they want others to cut 5% further.
In an interview with Russian state television channel Rossiya-24, Russian Energy Minister Alexander Novak said that Canada was ready to reduce oil production by around 1 million barrels per day.
“That’s news to me. I’ve never heard that number before,” ORegan told Reuters in a telephone interview. Referring to the restriction numbers, he said: “Exchange of numbers will come at some point, but not in this G20.”
The G20 call “is about finding a mechanism to achieve price stability,” O’Regan told reporters at a remote conference earlier. “We are not where we need to be right now.”
The province of western Alberta, Canada’s largest oil producing region, “has previously cut 80,000 barrels per day,” ORegan said, noting that he did not have the authority to promise reductions because it was the provincial government’s mandate.
A fall in demand could cause oil production in Canada to fall by 750,000 barrels per day, a government source said.
In an email, Artem Abramov, Head of Shale Research for Rystad Energy, said “Canadian oil production will fall in April by more than 1 million barrels per day due to economic reasons”.
Canada is the world’s fourth largest oil producer, extracting around 4.9 million barrels in February.
Earlier in the day, Prime Minister Justin Trudeau said that efforts to reduce global oil glut must be carried out in a “joint” way, without indicating whether the country would limit its own production.
In the interview, O’Regan also said aid promised for struggling energy companies would come soon.
“We will focus on liquidity,” O’Regan said, without giving details.
Reporting by Steve Scherer; Editing by Chizu Nomiyama, Rosalba O’Brien and Sandra Maler
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