Friday , June 25 2021

& # 39; Devil in Detail & # 39 ;: Reduced oil production met with mixed reviews of industry players.

Alberta will reduce or culminate crude and bitumen production in the New Year's Day.

Premier Rachel Notley, Edmonton's Premier, voiced a voice from all Alberta political parties, but he reacted firmly with the bigger players in the oil industry.

"It would be very happy to have a very large chain of supply chains with this type of constraint," said Peter Tertzakian, an economist at the ARC Energy Research Institute.

Alberta's largest oil and oil companies, Suncor Energy Inc and Husky Energy, announced Sunday that they would comply with production regulations, but expressed concern about the potential consequences of government intervention.

Watch Notley Announces Reduced Oil Production:

Alberta's Rachel Notley announced a temporary 8.7 percent cut in oil production from January 1, 2019, announcing a reduction of 325,000 barrels per day. 1:37

Rich Kruger, chief executive officer of Imperial Oil, said in a statement, "I disagree politely with the decision taken by the Alberta government."

"It is our view that free market intervention and involvement are accompanied by trade risks and send negative messages to investors about doing business in Alberta and Canada. Unfortunately, this intervention is not an investment decision that companies have made to reach high-value markets I do not recognize it. "

In a statement, Huskey Energy expressed support for a free-market system, fearing that the market was working and government-ordered reductions or other arbitrations could result in serious investment, economic and trade consequences.

"The devil will be in the details and will cooperate with the government with the aim of minimizing negative consequences," the statement said.

& # 39; Difficult but what you need & # 39;

Notley is under pressure to intervene in the industry facing pipeline issues and historically high price differentials, spending $ 80 million per day on national economic costs.

"The Alberta needs to sell oil at a discounted price because modern, well-regulated pipelines can not bring many of the oil we produce to the market. In the last few weeks, this price gap has reached historic highs. "We are producing far more products than shipping capacity," said Novelle.

Watch Notley explains why production cuts are needed.

Alberta Prime Minister Rachel Notley answers reporters after the announcement of a temporary oil production cut in the region. 1:11

This cut, which she calls a short-term solution, reduces production capacity by 8.7 percent, or about 325,000 barrels a day. She said daily cuts will be maintained until 35 million barrels of processed oil in the current stockpile are shipped to the market.

Cenovus Energy said in a statement issued by Notley that the decision was "difficult but necessary".

"Under normal circumstances, oil and gas producers will not support government intervention in the market, but these are not common," said Alex Pourbaix, president and CEO.

"It was not unanimous among the Alberta oil and gas companies to support the temporary cutback, but there was recognition for the seriousness of the crisis our industry faced."

Alex Pourbaix is ​​President and CEO of Cenovus Energy. (Jeff McIntosh / Canadian Press)

MEG Energy's CEO, Derek Evans, says his plan is to protect small producers.

"A very positive and impressive leadership by the prime minister," he said. "Good thinking, quick implementation, and interim measures with clearly defined endpoints."

Only 25 of the larger bitumen and conventional oil producers will be affected by the wound. Larger players can see the first barrels that are exempted for the first time everyday. Companies that produce less are not affected.

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