Wednesday , December 8 2021

"The Devil will be in the details": The oil production cuts met with & # 39; mixed review from industry players


Alberta will be ringing in the new year by reducing crude oil and bitumen production in the province.

The reduction, announced Sunday by the Premier Rachel Notley f & # 39; Edmonton, received vocal support from all political parties & # 39; Alberta, but obtained reaction decidedly mixed the largest players in the oil industry.

"I say that very large ones with & # 39; supply chains established during these types of & # 39; restrictions x & # 39; is not likely to be all happy", said Peter Tertzakian, economist & # 39; the ARC Energy Research Institute.

Two of the biggest players in & # 39; Aberta – oils homes and firms & # 39; refining SUNCOR Energy Inc. and Husky Energy – Sunday issued a statements saying they plan to comply with the regulation of the production of the province, but expressed concern about the potential consequences that can come from government intervention.

Notice of preparing oil production & # 39; Notley Notley:

Alberta Premier Rachel Notley announced a temporary reduction in oil production & # 39; 8.7 per cent, or a decrease of & # 39; 325,000 barrels a day, starting from 1 & # 39; January 2019. 1:37

The chief executive of & # 39; Imperial Oil, Rich Kruger, said in a statement that "respectively disagree" with the decision taken by the government & # 39; Alberta.

"Our view remains & # 39; to work and the free market intervention carry commercial risks and sends a negative signal to investors about doing business in & # 39; Aterat and Canada. Unfortunately, this -intervent appears to recognize the & # 39; investment decisions made companies to have access to & # 39; higher value markets. said.

F & # 39; statement, Huskey Energy also said expressed support for the free market system, said he believed that the market is working and reducing worry ordered by the government or other interventions can & # 39; have serious consequences & # 39 ; investment, economic and trade.

"The devil will be in the details, and we will work with the government on the implementation with a view to reducing the negative consequences", said the statement.

"Difficult, necessary boot"

Notley was under pressure to intervene in the industry facing the challenges of pipes and difference in historically high price saying that costs the national economy $ 80 million a day.

"The ALBERTANI can not transport much oil we market through & # 39; Modern pipelines and well regulated. As a result we sold żejtna at a discounted price. In the last few weeks this difference reached prices historical levels because we are producing many more products than there is transport capacity, "said Notley Sunday.

Watch Notley why she believes that the decline in production is required:

Alberta Premier Rachel Notley answer questions from journalists after announcement of & # 39; temporary cut oil production in the province. 1:11

The reduction, which is called a solution short & # 39; time, will see the capacity reduced by 8.7 percent, or about 325,000 barrels per day. She said that the reduction & # 39; & # 39 day will remain; in force until 35 million barrels & # 39; processed oil currently stored sent market.

Cenovus Energy decided decision "difficult, but necessary" in & # 39; issued a statement after the service & # 39; Notley Sunday.

"F & # 39; normal circumstances, the oil producers and gas never argue in favor of government intervention in the market but these are not ordinary circumstances", said president and CEO Alex Pourbaix.

"While support for mandatory reductions of & # 39; temporary production was not unanimous among the oil companies and gas & # 39; Alberta, the recognition of the severity of the crisis facing our -industrija was. "

Alex Pourbaix is ​​the president and CEO of & # 39; Cenovus Energy. (Jeff McIntosh / Canadian Press)

Derek Evans, the CEO & # 39; MEG Energy, said he was happy to hear that & # 39; small producers are protected under the plan.

"Very positive, impressive leadership by the premier," he said. "Prepared properly, rapid implementation, a temporary measure b & # 39; point clear and well defined."

Only 25 of the largest bitumen and conventional oil producers will be affected by the cuts. The big players will see their first exempted 10,000 barrels per day. Companies that produce less unaffected.

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