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
OTTAWA (Reuters) – Canada officially welcomed the OPEC and allies on Sunday to cut oil production by a record number, saying Ottawa is committed to achieving price certainty and economic stability.
“This is good. We welcome any news that brings stability to the global oil market,” Natural Resources Minister Seamus O’Regan said in a statement emailed to Reuters. The group, known as OPEC +, said it had agreed to reduce production by 9.7 million barrels per day (bpd) for May-June.
“The federal government is very concerned about the instability of oil prices … Canada is committed to achieving price certainty and economic stability,” O’Regan said.
Canada is the world’s fourth largest oil producer, extracting around 4.9 million barrels per day in February.
A Canadian government source said O’Regan had not officially agreed to the reduction policy because it was the responsibility of the country’s energy producing province. The source asks for anonymity given the sensitivity of the situation.
Reporting by David Ljunggren; Editing by Peter Cooney and Daniel Wallis
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
TORONTO / WINNIPEG, Manitoba (Reuters) – Canada’s steep cut in oil production is expected due to falling oil prices, the country’s two main energy companies said on Tuesday.
PHOTO PHOTO: Oil pump jack pumping oil in a field near Calgary, Alberta, Canada on July 21, 2014. REUTERS / Todd Korol / File Photo
Around 20-25% of West Canada’s crude oil production can be closed during the current second quarter, said Enbridge Inc’s Chief Executive Al Monaco. Western Canada produces around 4.5 million barrels per day in March, according to the Canadian Energy Regulator.
The estimate is in line with estimates of 1.1 million to 1.7 million barrels from the Royal Bank of Canada last week. Around 135,000 barrels per day have been cut so far, according to TD Securities.
Saudi Arabia, Russia and allied oil producers will only approve deep cuts in their crude production at talks this week if the United States and several other countries join the restrictions to help prop up prices that have been hammered by the coronavirus pandemic, OPEC sources. told Reuters on Tuesday.
Oil sands producer Cenovus Energy Inc. has reduced production at the Lake Christina oil sands operation by 40,000 to 45,000 barrels per day and has the capacity to cut more if needed, Chief Executive Alex Pourbaix said on Tuesday. The company can suspend production of more than 100,000 barrels per day in all of its operations without damaging the asphalt reservoir, he said.
“We think we can go beyond that if necessary and we can maintain it for months,” he said at the Bank of Nova Scotia virtual conference. Pourbaix reiterated support for further Alberta government restrictions to avoid a storage crisis and said global coordination about abatement might be needed to ensure the sustainability of a sustainable industry. “It is very difficult for anyone to argue that they are getting unexpected profits” at current prices, he said.
Even so, the queue for the oil sands expansion project has stalled in recent years due to a blocked pipe, the problem is now being resolved with three ongoing projects, including Enbridge’s Line 3, Monaco said.
“After a normal request, I think the (Western Canada) basin will be in good condition. We will see a resurgence in good volume. ”
The Canadian Province of Alberta, which is home to the third largest oil reserves in the world, regularly makes contact with OPEC Secretary General Mohammad Barkindo on solutions to restore the balance of the oil market, said Alberta Energy Minister Sonya Savage.
“I think there is worldwide recognition that this is not sustainable,” he said.
Reporting by Jeff Lewis in Toronto and Rod Nickel in Winnipeg, Manitoba; Editing by Sandra Maler and Bernadette Baum