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Moody’s Cuts Credit Rating of Canadian Oil Sands

The rating action targeting the largest owner of Canada’s giant Syncrude oil-sands mining consortium comes amid a swoon in oil prices below $40 a barrel, which has eroded profit margins in the energy industry and made it more difficult for highly-levered oil producers to service their debt loads. Moody’s lowered its creditworthiness assessment of Canadian Oil Sands’ senior unsecured debt to Baa 3 from Baa 2 and kept its “negative” outlook for the Calgary-based company. Baa 3 is Moody’s lowest rung of investment-grade credit and just above the speculative, or junk, grade. “Moody’s expects negative free cash flow [at Canadian Oil Sands] of about 125 million Canadian dollars ($94 million) from June 30, 2015, to September 30, 2016, to be largely debt funded,” it said. The ratings action was prompted by the recent tumble in crude prices to more than six-year lows and Canadian Oil Sands’ deteriorating balance sheet. […]

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Canada’s Largest Refinery Shifts from Bakken Shale Oil to Brent Crudes

The operator of Canada’s largest crude oil refinery, Irving Oil Ltd., said it has stopped importing Bakken Shale oil from the U.S. in favor of cheaper crudes from such producers as Saudi Arabia, reflecting a shift in crude costs affecting East Coast refiners during a global slump in oil prices. The closely held company’s 320,000-barrel-a-day refinery in Saint John, New Brunswick, one of the biggest by volume in North America, has reduced purchases of Bakken crude shipped by rail to zero from a high of nearly 100,000 barrels a day two years ago, Irving President Ian Whitcomb said in an interview on Thursday. “We’re not importing any Bakken crude right now,” he said. The move reflects shifting economics in the energy industry even as the price of oil—including Bakken crude—has slumped to six-year lows . A once-yawning gap, between the cost of oil produced in North America and overseas […]

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Canadian Oil-Sands Producers Struggle

CALGARY, Alberta—Canada’s high-cost oil-sands producers are struggling as oil prices sink to fresh six-year lows, and even the most efficient drillers are losing money on every barrel they produce at current prices, according to a report published Wednesday. Canadian oil-sands production has grown 30% in the past five years but the recent price slump has hit producers’ bottom lines and forced them to suspend development of new projects. Western Canadian heavy crude costs more to extract than other oil sources because it must be separated from deposits of sand. It also trades at a discount to other crudes, in part because of the distance it must be transported from remote boreal forests in Alberta. Benchmark West Texas Intermediate oil cost less than $41 a barrel in Wednesday trading, which although at multiyear lows was still well above the Western Canadian Select average of around $24 a barrel. More than […]

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As Canada’s Oil Debt Soars to Record, an Industry Shakeout Looms

Canadian energy companies’ debt loads are the heaviest in at least a decade, boosting concern that some won’t survive the collapse in crude prices. (Bloomberg) — Canadian energy companies’ debt loads are the heaviest in at least a decade, boosting concern that some won’t survive the collapse in crude prices. Trican Well Service Ltd., Canada’s largest fracking service provider, said last week it may be unable to continue because it’s in danger of breaching the terms of its debt. It’s the latest firm to see crude’s descent to a six-year low sap the cash flow needed to meet financial obligations. Oil’s plunge has pushed a measure of the average debt burden among Canadian energy firms to the highest since at least 2002, and another measure of their ability to make interest payments to the third-lowest level in a decade, according to data compiled by Bloomberg. Facing some of the […]

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Brace for More Dividend Cuts in Canada Oil Patch

Dividend cuts among Canadian energy producers are poised to accelerate as cost reductions fail to boost shrinking cash flow. Companies from Canadian Oil Sands Ltd. to Baytex Energy Corp. are in line for deeper payout decreases, according to analysts, after Crescent Point Energy Corp. slashed its dividend for the first time last week as crude sank to a six-year low. Just 38 percent of the 63 energy companies in Canada’s Standard & Poor’s/TSX Energy index had positive free cash flow, defined as operating cash flow minus capital expenditures, as of Aug. 17. That’s down from 43 percent in 2013, data compiled by Bloomberg show. The dwindling cash flow comes even after Canadian companies joined some $180 billion in global cutbacks this year, the most since the oil crash of 1986, according to Rystad Energy AS, an Oslo-based energy consultant. “There’s so much cash being spent on dividends,” said Greg […]

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Alberta producers review low-carbon agenda

Canadian oil and gas production group seeks balance in developing low-carbon economy in Alberta. Photo by akiyoko/Shutterstock CALGARY, Alberta, Aug. 17 (UPI) — Canadian oil and gas producers will work with the government in Alberta to find a balance between economic and environmental gains, a top executive said. The provincial government of Premier Rachel Notley appointed a five-member panel to develop a climate change strategy for resource-rich Alberta. Parks and Environment Minister Shannon Phillips said the panel is driving toward an organic and domestic-driven agenda . "Climate change is a threat we all face, affecting everything from our health, food production and fresh water, to biodiversity and our economy," she said in a statement. "All Albertans will have an opportunity to contribute to their province’s new plan to address this pressing global issue here at home." Most of Canadian oil sector activity is based in Alberta, a province that […]

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Canadian Stocks Resume Declines as Oil Slumps to Six-Year Low

Canadian stocks resumed their slide, falling for the fourth time in five sessions, as crude prices traded at the lowest in more than six years and financial shares slumped. Energy producers paced a decline in equities as crude futures dropped 1.5 percent in New York amid an increase in U.S. drilling and the prospect OPEC production may rise to a record after sanctions on Iran are lifted. Concerns grew that demand for oil may slip as manufacturing in New York unexpectedly shrank and Japan’s economy contracted last quarter. The Standard & Poor’s/TSX Composite Index fell 26.35 points, or 0.2 percent, to 14,251.53 at 4 p.m. in Toronto, paring a loss of as much as 0.7 percent in the final half hour of trading. The benchmark Canadian equity gauge has fallen 2.6 percent this year. Commodities producers are the worst-performing industries in the S&P/TSX this year as crude has slumped […]

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BP Refinery Outage Could Push Down Oil Prices

The outlook for Canada’s oil sands is pretty grim, but it just got hit with an unexpected blow. An outage at a Midwest refinery could lead to deeper discounts for Canadian oil for several months. BP’s Whiting refinery in Indiana was forced offline for unexpected repairs. Without going into too much detail, BP said that it “shut down the largest of its three crude distillation units for unscheduled repair work.” It also said that production has been cut back at the refinery, which has the capacity to process 413,000 barrels per day, or 19 million gallons of refined fuel each day. The disruption of the Indiana-based Whiting refinery could lead to a spike in gasoline prices in the Midwest as the region suddenly encounters shortages of fuel supplies. Gas prices in Chicago are above $3 per gallon, while the national average is $2.61. The impacts could reverberate beyond the […]

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Abu Dhabi’s Taqa Cuts 22% of Jobs Amid Loss on Falling Oil Price

Abu Dhabi National Energy Co., the government-owned utility that produces crude from Canada to the U.K., has slashed 22 percent of its oil and gas jobs in the past year amid a loss due to tumbling global prices. The company known as Taqa plans to cut spending 2.5 billion dirhams ($681 million) this year after reducing capital expenditures by 1.05 billion dirhams in the first half, according to an e-mailed statement from the company on Thursday. Headcount at the Abu Dhabi headquarters is down 32 percent since July last year. Oil producers are cutting costs after Brent crude slumped 48 percent last year and is down another 13 percent this year. Taqa’s oil and gas production averaged 150,000 barrels of oil equivalent a day in the first six months, down 5 percent from a year earlier as revenue from the business slumped 48 percent. “While the current commodity price […]

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CERI: Lower demand, prices may trim near-term oil sands spending

Lower crude oil prices and reduced demand resulting from a global economic downturn could reduce Canadian oil sands capital expenditures through 2017, the Canadian Energy Research Institute said. Production and capital outlays still are expected to increase well into the future, it emphasized in its latest Oil Sands Supply Update . Production from Canada’s oil sands reached 2.34 million b/d in 2014, 11% higher than 2013’s 2.08 million b/d, CERI’s 10th annual oil sands update said. “Production from oil sands includes an increasing share of Alberta’s and Canada’s crude oil production,” it noted. “In 2014, non-upgraded bitumen and [synthetic crude oil] production made up 58% of total Canadian crude production and 74% of Alberta’s total production.” CERI expects oil sands production to reach 3 million b/d by 2020, despite increased production and what it termed “market access challenges.” In addition to several in-situ projects or phases currently under way […]

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Canadian Heavy Crude Slumps To Lowest In At Least A Decade

CALGARY, Alberta, Aug 12 (Reuters) – Heavy Canadian crude slumped to its lowest level in at least a decade on Wednesday after Enbridge Inc closed two of its main pipelines in the United States because of a leak, piling fresh misery on Canadian oil companies that are close to producing at a loss. Western Canada Select heavy blend crude for September delivery last traded at $20.75 per barrel below the West Texas Intermediate benchmark, according to Shorcan Energy brokers, having settled at $19.80 per barrel below on Tuesday. Earlier in the session it hit $21.75 per barrel below WTI, the widest differential since August last year. That pushed the outright price of Canadian heavy crude to around $22.50 a barrel, a level at which some companies will struggle to cover the cost of production, blending and transportation. It was lower than the 2008 trough of $24.62, according to one […]

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Canadian oil sands crude halves in price

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Oil-Sands Syncrude Drop Reveals Downturn Tactic as Outages Surge

Canadian synthetic crude production fell 15% from previous year Producers of light synthetic crude from Canada’s oil sands found a way to manage this year’s price slump by churning out less and getting more maintenance work done. The strategy is highlighted by a 15 percent decline in the production of the Syncrude benchmark in May from a year earlier, according to data reported by Statistics Canada on Monday. Oil-sands operators including Royal Dutch Shell Plc cut output while collectively undertaking the biggest set of repairs this spring in five years at their upgraders, plants that turn bitumen into light oil, according to Genscape Inc., an energy data company. The work followed the lowest average quarterly price for benchmark U.S. crude since 2009. “From a strategic point of view, I’m sure these major companies are betting that the peak of oversupply is this year, now,” said Carl Evans, a Genscape […]

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Canadian Stocks Plunge as Commodities Slump on Yuan Devaluation

Canadian stocks fell, a session after raw-materials producers had their strongest gains this year, as China’s currency devaluation prompted a selloff in commodities. Equities reversed most of Monday’s gains and declined for the third time in four days as energy and raw-materials companies lost more than 2 percent. Canadian Natural Resources Ltd. and TransCanada Corp. fell at least 1.6 percent. Crude oil retreated 3.8 percent after its biggest rally in a month in New York. Commodities declined amid speculation yuan weakness will erode the buying power of Chinese consumers. The Standard & Poor’s/TSX Composite Index fell 151.15 points, or 1 percent, to 14,315.24 at 10:39 a.m. in Toronto, after a 1.1 percent advance Monday that was the biggest in more than a week. The gauge has fallen 2.2 percent in 2015, one of only three developed markets in negative territory for the year among the 24 tracked by Bloomberg. […]

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Canadian oil exports hit low mark for year

Canadian energy regulator reports total crude oil exports for May were at their lowest point for the year. Photo by Heather Snow/Shutterstock CALGARY, Alberta, Aug. 7 (UPI) — Canada reported total oil exports for May were at their lowest level for 2015, though slight increases have emerged while the country moves into recession. The National Energy Board in Canada reported total exports through May, the last full month for which it has data. Government data show total crude oil exports for May at 2.8 million barrels per day, about 10 percent less than April and the lowest monthly total for the year. The wildfire threat is high in the Pacific Northwest, with provincial response teams in British Columbia and Saskatchewan battling the blazes. In May, producers Canadian Natural Resources and Cenovus Energy curbed production, closed facilities and evacuated staff from Alberta operations during wildfire outbreaks. Fires were as close […]

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Economy Takes Center Stage as Harper Kicks Off Canada Election

Canadian Prime Minister Stephen Harper. Photographer: Patrick Doyle/Bloomberg Prime Minister Stephen Harper began Canada’s longest election campaign in more than a century by touting his economic stewardship as his main rivals jockeyed to be seen as the best agent of change. The incumbent Conservative leader fired the starting gun early on Canada’s 42nd election campaign Sunday morning, meeting Governor General David Johnston, Queen Elizabeth II’s representative in Canada, to request parliament be dissolved. The visit marked the formal start of campaigning for an Oct. 19 vote, with polls showing Harper’s nine-year reign being threatened by a leftist party that’s never governed the country. “A national election is not a popularity contest,” Harper, 56, said outside Ottawa’s Rideau Hall. “Canadians will make a serious choice between proven, real-world experience and a dangerous approach that has failed before and is failing in other countries.” The Conservatives are locked in a three-way […]

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Imperial Oil Profit Drops 90% on Tax Charge, Low Crude Prices

Imperial Oil Ltd. IMO -0.56 % on Friday posted a 90% drop in its second-quarter profit, hurt by a large charge for a tax-rate increase in Alberta, slumping global oil prices and in the absence of a year-earlier gain on the sale of an asset. The Calgary, Alberta, integrated energy company, the Canadian subsidiary of Exxon Mobil Corp. XOM -4.58 % , did get a boost from stronger production levels in the quarter, helped in part by the early startup of an oil-sands expansion project in northern Alberta. Overall production rose nearly 20% to 344,000 barrels of oil equivalent a day, which the company said was its highest quarterly production level in nearly eight years. In June, Imperial Oil announced that production from the Kearl oil-sands expansion project had started earlier than scheduled. The 9 billion Canadian dollar ($6.9 billion) project is expected to add 110,000 barrels a day […]

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TransCanada Alberta Pipelines Set Back by Oil Rout, Keystone Lag

TransCanada Corp. is slowing work on two pipelines in Alberta because of reduced demand tied to lower crude prices and setbacks to its major oil export projects. TransCanada is indefinitely bumping back construction that was planned for earlier this year on its Heartland line from Edmonton to Hardisty since the Keystone XL and Energy East systems it would supply are delayed, executives said Friday on a conference call. Full expansion of the company’s Grand Rapids line from Fort McMurray to Edmonton, now under construction with startup planned for 2016, is being slowed as production rises more slowly in the oil sands. “A lot of the commercial underpinning for Heartland is tied to Energy East and Keystone XL,” said Paul Miller, president of liquids pipelines at TransCanada. “We do anticipate a slowing growth of throughput and build-out of the Grand Rapids system to align with the slowing pace of oil […]

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Canadian Oil Sands Posts Loss on Lower Crude Prices

CALGARY, Alberta— Canadian Oil Sands Ltd. COSWF 0.90 % on Thursday reported a net loss in the second quarter, citing lower prices for its crude and the effect of a two percentage point corporate tax hike in the Western Canadian province where it operates. The largest owner of the Syncrude oil sands project in northern Alberta lost 128 million Canadian dollars ($98.4 million), or 26 Canadian cents a share, in the three months to June 30, compared with a net profit of C$176 million, or 36 Canadian cents a share, in the year-earlier period. It said the loss mainly came from a C$120 million deferred tax expense reflecting an increase in Alberta’s corporate tax rate to 12% from 10% previously. The company also suffered from a global crude oil price drop, which has affected many so-called unconventional producers of oil-sands crude and shale oil. Citing expenses in excess of […]

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Suncor Deepens Spending Cuts for 2015 as Oil Price Languishes

Suncor Energy Inc., Canada’s largest oil producer, cut its spending plan for 2015 for a second time and eliminated some non-essential projects as part of cost-reduction efforts. The company now plans to spend between C$5.8 billion ($4.5 billion) and C$6.4 billion from an earlier range of C$6.2 billion and C$6.8 billion, Calgary-based Suncor said Wednesday Canadian time in a statement on Marketwired. Suncor has already cut about 1,000 jobs and previously lowered its 2015 capital budget by C$1 billion while delaying projects to weather collapsing prices. Still, it’s pressing ahead with the C$13 billion Fort Hills oil-sands mine. The move to cut spending comes after the price of West Texas Intermediate moved back into a bear market, dropping below $50 a barrel earlier this month for the first time in about a quarter. The U.S. benchmark, averaged about $58 in the second quarter compared with about $103 in the […]

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Cnooc Oil-Sands Spill Worsens Outlook for Canada Pipeline Plans

Crews clean an oil spill at Nexen Energy’s Long Lake facility near Fort McMurray on July 22, 2015. Photographer: Jeff McIntosh/The Canadian Press via AP It’s becoming increasingly difficult to get oil-sands pipeline projects off the ground, and Alberta’s worst spill since 1980 will probably make it tougher. A rupture in a line operated by Nexen, a unit of China’s Cnooc Ltd., spewed 31,500 barrels of bitumen, waste water and sand into the bog-like muskeg of the province’s north this month, igniting outrage from communities along pipeline routes. The crude in the slurry would be enough to make gasoline to fill up about 15,000 cars. The leak is bolstering opposition that has stalled every major crude export project from Canada in recent years and may lead to more stringent regulations. The delays to multibillion-dollar pipelines such as TransCanada Corp.’s Keystone XL are threatening output growth and have led producers […]

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Canada expects gas production lift

Canadian regulator expects initial shale gas production rates to increase through 2017 in western parts of the country. Photo by Steve Oehlenschlager/Shutterstock CALGARY, Alberta, July 23 (UPI) — Technological improvements in drilling into natural gas basins in Western Canada means initial production rates should increase through 2017, a regulator said. The National Energy Board said average initial production rates in gas basins in the area declined from 2000 to 2006 as most operators focused on conventional deposits. Since 2007, operators have started focusing on reserves locked in shale basins , which are harder to exploit. "Because these tight and shale formations tend to have higher initial production rates than the mature conventional resources of the Western Canada Sedimentary Basin, the overall average initial production rates started increasing," the NEB said in a report. "This upward trend to all initial production rates is expected to continue through 2017." A forecast […]

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Jobs Machine From Canada Oil Slows as Robots Add to Price Slump

Truck driver Craig Huzulak is unemployed after losing his job four times since December — the new normal in a Canadian oil patch still reeling from a downturn. Huzulak, 49, was working at a mine last year near Fort McMurray, Alberta, when crude prices plunged and work dried up. He lost two more positions in the following months and then had a job offer yanked at the end of June before he could even start. In addition to the market rout, the father of two now worries about the self-driving trucks Suncor Energy Inc. is rolling out in its oil-sands mining operations that will replace workers like him to save companies money. “It’s really, really hard for heavy-equipment operators,” said Huzulak, who has driven trucks and worked on drilling rigs in Western Canada for 15 years. “There’s a lot more fear now that this might last longer.” The burgeoning […]

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How a Chinese Company Slipped on Canada’s Oil Sands

Weeks after the state-controlled oil company bought Nexen for $15 billion, its executives were in Calgary with a blunt message for the Canadian company, which had struggled for years to extract crude from the oil sands in the Alberta wilderness. Cnooc Chief Executive Li Fanrong told staffers Nexen provided just 2% of Cnooc’s profits, say attendees, warning that “2% is not enough.” Two years later, Cnooc is still trying to fix Nexen, its troubles compounded by low crude prices. And now Cnooc must explain an oil spill: This month, a pipeline Nexen installed last year ruptured, spilling nearly 31,500 barrels of a mixture of crude oil, wastewater and sand in northern Alberta. Nexen’s chief executive, Fang Zhi, on Wednesday stood by the oil-spill site near the hamlet of Anzac. “It is very disappointing that this has happened,” he said, the scent of petroleum wafting. “I therefore personally apologize.” Buying […]

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Falling Crude Prices Upend Canada’s Oil Sands Projects

Two years ago Canadian oil sands producer Cenovus Energy Inc., CVE -2.54 % buoyed by success at its flagship project and eager to cut operating expenses, halved the amount of instrumentation used to measure finicky temperature and pressure at its wells. But that turned out to be a costly mistake that cut into its Foster Creek site’s production volumes, which only have recently recovered after the company reversed course. “We started to cut our operating costs, but in hindsight that’s a lesson learned,” Harbir Chhina, Cenovus’ executive vice president in charge of oil sands, said in an interview. “If I compare the oil sands to a baseball game, I think we just finished the first inning,” he said. Of the roughly two million barrels a day that Canada currently produces from its oil sands, about half is mined from the surface using giant excavators and the world’s tallest dump […]

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Alberta pipeline breach causes massive spill

China-subsidiary company apologizes, says cleanup underway for one of North America’s largest-ever oil spills on land Nexen Energy apologized Friday for an oil sands pipeline leak in the Canadian province of Alberta that is one of North America’s largest-ever oil-related spills on land, and said its cleanup crews were working around the clock. The pipeline leaked 31,500 barrels of emulsion — a mixture of bitumen, water and sand, the equivalent of 5 million liters of tar sands oil, or 1.3 million gallons. Nexen, a subsidiary of China’s CNOOC Ltd., said it is still trying to find the root cause of the leak in the new pipeline, which was installed last year. The company has found a visible breach about the size of a hand. The incident is another blow for the environmental record of the oil sands industry, already under fire from activists for its carbon-intensive production process. Ron […]

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Canada Provinces Agree To Strategy On Pipelines, Climate Change

OTTAWA, July 17 (Reuters) – Canada’s provinces reached a long-sought deal on Friday over an energy plan for the country, agreeing broadly to curb greenhouse gas emissions while also promoting the use of pipelines. The oil-producing province of Alberta originally conceived the strategy as a way to ensure that it could move its fuel to market. The plan was changed at the insistence of some of the provinces to reflect their desire to fight climate change. Alberta and Saskatchewan have limited markets for their land-locked oil, with environmentalists opposing pipelines that have to go through other provinces to reach the Pacific or Atlantic oceans. These include the Energy East pipeline proposed by TransCanada Corp, which is also trying to build the controversial Keystone XL pipeline through the United States. Canada’s provinces agreed to ensure that regional, Canadian and international infrastructure exists for sending energy products to domestic and international […]

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Canada set energy sector records last year

Federal regulator’s report points to strong 2014 for energy sector, though industry groups less optimistic in their 2015 forecasts. Image courtesy of the National Energy Board. CALGARY, Alberta, July 16 (UPI) — A federal Canadian report on the energy sector pointed to a strong 2014, though industry groups this year suggest rough waters are ahead in a weak oil market. The National Energy Board, the federal regulator, released a report on full-year 2014 production . Though crude oil prices fell roughly 50 percent from June 2014 to year’s end, the NEB said the energy sector was resilient and export revenue of $100 billion set a record. Total Canadian crude oil production in 2014 increased by 7.9 percent year-on-year to around 3.75 million barrels per day. "This growth is largely attributed to increased oil sands production, including several new in situ bitumen projects coming on-line and increased tight oil production […]

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To Clean Up Oil Sands’ Dirty Image, Alberta May Try Emission Tax

Alberta’s new government is engaged in a balancing act. It’s trying to cut carbon emissions while protecting an oil-sands industry that supports hundreds of thousands of jobs. Tar sands are found almost exclusively in the western Canadian province. They produce a product that generates about 17 percent more carbon dioxide on average than conventional oil, and emissions in Alberta have risen by more than 53 percent since 1990. At the same time, they’re the nation’s single most valuable export, making up nearly a fifth of total foreign sales. The challenge for the government is to work with an industry, already struggling with price cuts, on ways to hold off environmental criticism of the tar sands. Opponents have so far blocked the Keystone XL pipeline that would carry the oil to the U.S., and limited the world’s third-largest reserve from reaching new buyers. “If Alberta wants better access to world […]

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Canadian imports of US crude hit fresh highs in May: Statistics Canada

Canada imported a record 573,400 b/d of US crude in May, Statistics Canada data showed. As US crude exports are heavily restricted, the lion’s share of US exports often go to Canada as much of the refined product produced eventually feeds into US Northeast demand. Canada has four refineries on its East Coast: Irving Oil’s 300,000 b/d Saint John facility in New Brunswick; Harvest Operations’ 115,000 b/d Come By Chance refinery in Newfoundland and Labrador; and Valero’s 265,000 b/d Jean Gaulin refinery and Suncor’s 137,000 b/d Montreal refinery, both in Quebec. While these refineries traditionally take Atlantic Basin crudes — including offshore Canadian production — they have recently been sourcing more and more barrels from Texas, and increasingly North Dakota and Wyoming as well, Statistics Canada data shows. Article continues below… Crude Oil Marketwire delivers vital intelligence to help you make critical decisions. Delivered daily direct to your desktop, […]

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Loonie Storm Alert Is Sounded With Oil Poised to Swamp Demand

One of Wall Street’s favorite short bets looks ready for a comeback after the Canadian dollar plunged to its lowest point in more than two months. The currency’s fall Monday undoes all its gains since the Bank of Canada first expressed hope at its April interest-rate decision the economic fallout from crude oil’s price collapse would be short-lived. Crude prices had stabilized in recent months and helped the currency recover, but Brent crude fell below $60 a barrel Monday for the first time since April. The renewed pressure on crude prices comes after signs the fallout from their first leg down wasn’t as short-lived as the Bank of Canada thought. A report last week showed the economy contracted for a fourth straight month in April, bringing annualized growth to the slowest in two years. That’s raised doubts about the central bank’s forecasts for a strong rebound in the second […]

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Canada Surprise April Contraction Opens Door to 2nd Rate Cut

Canada’s economy shrank for the fourth straight month in April as oil and mining slumped and a rebound in manufacturing remained elusive, opening the door to a second interest-rate cut from the central bank this year. Output shrank 0.1 percent to an annualized C$1.65 trillion ($1.33 trillion) in the month, Statistics Canada said Tuesday, confounding economists’ expectations for a 0.1 percent expansion in a Bloomberg survey. Oil and gas, mining and quarrying fell 2.6 percent in the month, the sixth consecutive decline as crude’s slide continued to hammer Canada’s resource-rich economy. The data failed to show the strength in non-energy exports and consumer spending the Bank of Canada was counting on to take over as drivers of growth after output shrank at an annualized 0.6 percent in the first quarter, and raises the pressure to cut interest rates again at the July 15 meeting. “They shouldn’t wait any longer, […]

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Canadian oil producers back lower emissions

Canadian oil production group said it has a commitment to lowering emissions. Alberta government expected to raise carbon taxes on industry struggling to navigate weak crude oil market. Photo by Pattie Steib/Shutterstock CALGARY, Alberta, June 26 (UPI) — An industry group in the Canadian oil sands sector said it was committed to playing a greater role in the effort to reduce greenhouse gas emissions. The Canadian Association of Petroleum Producers said that, since 1990, the sector has spent more than $1 billion on technologies needed to produce oil with a lower environmental footprint. With climate action moving to the forefront of the global conversation, the industry group said it was prepared to do more . "We developed the technology to get the oil out of the sand – and we are just as committed to getting our carbon out of the air," CAPP President Tim McMillan said in a […]

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Quebec Becomes Latest Hurdle to Canada’s Plans for Oil Exports

Protesters hold a banner that reads, “Don’t flow near us,” in French. Photographer: Rebecca Penty/Bloomberg Across Quebec, cardboard signs are popping up on lawns depicting a broken pipe gushing black crude. “Don’t flow near us,” they warn in French. That sums up Benoit Pigeon’s feelings about TransCanada Corp.’s proposed C$12 billion ($9.7 billion) pipeline that would traverse the province on its way to connect Alberta oil-sands fields with the Atlantic Coast. In addition to his yard sign, Pigeon has marched with street protesters and helped rally opposition to the project on Facebook. “This investment should be in renewable energy instead,” Pigeon, 51, said in an interview at his home. For a resource-rich nation eager to expand crude exports from the oil sands, Canada has been striking out lately. TransCanada’s Energy East marks the fourth time this decade an oil-sands pipeline has been mired in environmental opposition. Keystone XL, which […]

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Canada’s Weaker Dollar Helps to Blunt Oil Shock, Schembri Says

A weaker dollar is helping Canada’s economy cope with a drop in crude oil prices, central bank Deputy Governor Larry Schembri said. Regions such as Alberta, Saskatchewan and Newfoundland are hurting from the drop in crude oil prices over the last year, Schembri said in response to questions after a speech Thursday in Windsor, Ontario. Other parts of Canada are benefiting from the currency’s drop against the U.S. dollar and signs of an accelerating recovery south of the border, he said. “We are seeing more strength in Ontario to compensate for the fact that oil production and investment is declining in Alberta,” Schembri said. “That kind of adjustment is facilitated by the flexible exchange rate.” Canada’s dollar has depreciated by 13 percent against its U.S. counterpart over the last 12 months, making exporters more price competitive. It traded at C$1.2340 at 1:12 p.m. Toronto time. West Texas Intermediate is […]

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Alberta to Double Carbon Tax in Step to Toughen Environmental Policy

CALGARY, Alberta—The recently elected government of Alberta said Thursday it will double a carbon tax on industrial emissions of greenhouse gases by 2017, calling it a first step in toughening this oil-rich province’s environmental policies. In a move closely watched by Canadian oil and gas producers, the left-leaning New Democratic Party, or NDP, government said the policy is part of a broader review of environmental policies that will result in additional measures to reduce greenhouse-gas emissions in time for a year-end United Nations climate-change conference in Paris. Alberta implemented its current carbon tax—the first in North America—in 2007, but that was set to expire at the end of this month. The new policy will increase levies on large-scale emitters of carbon dioxide to 30 Canadian dollars ($24.19) a metric ton by 2017, up from C$15. Alberta’s energy industry has been shaken by the NDP’s win, and has warned about […]

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Canada files charges for Lac-Megantic disaster

Canadian government files federal charges in relation to the Lac-Megantic oil-train disaster, which in 2013 left more than 40 people dead. Photo by Steven Frame/Shutterstock OTTAWA, June 23 (UPI) — The Canadian transport authority said it filed legal charges in connection with the Lac-Megantic oil-train disaster in 2013 under two federal acts. The federal Transport Canada said charges filed for violations of the Fisheries Act relate to the release of crude oil in and around the site of the 2013 derailment into fish-bearing waters. Charges under the Railway Safety Act relate to insufficient application and testing of handbrakes on the locomotive. Montreal, Maine and Atlantic Railway, the train’s operator, blamed the air brakes on the locomotive holding the freight for the Lac-Megantic incident and later filed for bankruptcy protection. The disaster left more than 40 people dead. "The actions taken by the government of Canada in response to this […]

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DOE Study Finds Elevated Greenhouse Gas Emissions From Canadian Crude

A new peer-reviewed study funded by the U.S. Department of Energy says Canada’s oil sands greenhouse gas emissions are an average of 20% higher than U.S. conventional crude, adding ammunition to opponents of the Keystone XL pipeline and other critics of surging Canadian crude production. The study, conducted by DOE’s Argonne National Laboratory in collaboration with researchers at Stanford University and the University of California-Berkeley’s Institute of Transport Studies, calculated greenhouse gas emissions from oil field extraction to the tail pipe in a so-called well-to-wheel analysis. Noting oil sands output is projected to more than double in the next 15 years and that much of that crude could wind up in the U.S., the study said “higher [well-to-wheel] emissions for gasoline and diesel production in the U.S. are expected when oil sands products become a larger fraction of the U.S. fuel mix.” “All crudes are not created equally,” Hao […]

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Oil-Sands Megaproject Era Wanes as Suncor Scales Back

Oil sands in Alberta. Photographer: Ben Nelms/Bloomberg The era of the megaproject in Canada’s oil sands is fading. Crude’s price slump, pressure to get off fossil fuels and tax increases in Alberta are adding to high costs and a lack of pipelines, prompting producers from Suncor Energy Inc. to Imperial Oil Ltd. to accelerate a shift to smaller projects. Companies are deferring new mines in favor of cheaper, bite-sized drilling programs that deliver quicker returns and require less labor. The moves will help reduce cost overruns and make Canadian companies more competitive with U.S. shale producers. The trade off will be reduced production growth and a smaller economic boost for the country’s oil patch. “Capital likes certainty and it’s a bit of an uncertain world at the moment,” Steve Williams, Suncor’s chief executive officer, said June 10 in an interview at Bloomberg’s Calgary office. With crude about 46 percent […]

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WoodMac: Western Canadian liquids production on upward trajectory starting in 2016

Wood Mackenzie Ltd. believes the economics of core areas within shale plays in western Canada will yield comparable returns to key producing plays in the US Lower 48. “Our western Canadian liquids production forecast is underpinned by an increasing commodity price environment and growing demand for oil sands diluent. We anticipate an upward trajectory in volumes beginning in 2016 and peaking in 2021 with the Montney, Duvernay, and Cardium formations driving volumes,” said Peter Argiris, WoodMac upstream analyst in Calgary. While WoodMac’s liquids growth outlook remains positive, there is a potential downside to the forecast. “One factor that is currently front of mind is the supply-infrastructure constraints from the lighter end of the NGL stream,” Argiris said. “Propane supply is at historic levels and we have seen material price declines as a result. How this affects the remaining NGL stream (apart from diluent) from a pricing-infrastructure capacity perspective could […]

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Oil-Sands Megaproject Era Wanes as Suncor to Imperial Scale Down

(Bloomberg) — The era of the megaproject in Canada’s oil sands is fading. Crude’s price slump, pressure to get off fossil fuels and tax increases in Alberta are adding to high costs and a lack of pipelines, prompting producers from Suncor Energy Inc. to Imperial Oil Ltd. to accelerate a shift to smaller projects. Companies are deferring new mines in favor of cheaper, bite-sized drilling programs that deliver quicker returns and require less labor. The moves will help reduce cost overruns and make Canadian companies more competitive with U.S. shale producers. The trade off will be reduced production growth and a smaller economic boost for the country’s oil patch. “Capital likes certainty and it’s a bit of an uncertain world at the moment,” Steve Williams, Suncor’s chief executive officer, said June 10 in an interview at Bloomberg’s Calgary office. With crude about 46 percent below last year’s level, companies […]

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Energy job losses mount for Canada

Canadian drilling association said it expects job losses to mount in a weakened energy sector. UPI/Shutterstock/Kodda CALGARY, Alberta, June 16 (UPI) — More than 25,000 total jobs are expected to be lost in the Canadian exploration and production sector, a well drilling association said. The Canadian Association of Oilwell Drilling Contractors said it was revising downward its drilling forecast because of lower crude oil prices and changing market conditions in the resource-rich province of Alberta. "Since its last revision in January 2015, the number of operating days is expected to decline by an additional 10,320 days or 13 percent," the association said in its latest forecast. "A sharp drop in the number of overall operating days means an estimated reduction of 25,110 total jobs in 2015, down almost 50 percent from the 2014 total of 49,950." The Canadian National Energy Board said it was monitoring crude oil prices as […]

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Report: Canada Could Lose 185,000 Oil, Gas Jobs in 2015

Since late last year, oil and gas companies globally have fought to sustain the drop in oil prices … layoffs ensued and companies large and small were affected. And according to a new study released by the Petroleum Labour Market Information (PetroLMI) Division of Enform, a safety association for upstream oil and gas in Canada, there’s a prediction that 185,000 jobs will be lost in Canada this year due to the drop in oil prices. According to the study, in 2014, the oil and gas industry spent nearly $125 billion on exploration, development and production – which supported more than 720,000 direct and indirect jobs in Canada. About two-thirds of these jobs were concentrated in Alberta. The Canadian Association of Oilwell Drilling Contractors (CAODC) recently forecasted that more than 25,000 Canadian drilling jobs would be lost due to weak oil prices, Reuters reported. CAODC president Mark Scholz said “potential […]

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Oil-Sands Operations Resume After Wildfire

Both major oil-sands producers’ operations are located in Alberta’s Cold Lake region, about 300 kilometers (186 miles) northeast of Alberta’s capital, Edmonton. The blaze had shut in nearly 10% of Canada’s oil-sands output, or about 233,000 barrels a day, since it was detected May 22. Canadian Natural said full production has resumed at its 80,000-barrel-a-day Primrose site, which had been evacuated due to the closure of an access road, and its 25,000-barrel-a-day Kirby South operation, which had cut back output after the shutdown of a third-party pipeline. Cenovus said operations have returned to normal at its nearby Foster Creek site, which has a capacity of 135,000 barrels a day and is jointly owned with ConocoPhillips . COP -0.81 % The Calgary-based company said it expects the 11-day shutdown to reduce second-quarter production by about 10,500 barrels a day and crimp annual production by about 2,600 barrels a day. However, […]

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Opinion: Busting The “Canadian Bakken” Myth

« Major Dutch waste-to-chemicals initiative more than doubles with new partners | Main | CA Energy Commission awards CSE $1.5M for development of standards-based smart EV charging platform; first employment of ISO/IEC 15118 » The financial pages of Canadian newspapers have been full of headlines lately announcing the potential of two large shale oil fields in the Northwest Territories said to contain enough oil to rival the Bakken Formation of North Dakota and Montana. The report by Canada’s National Energy Board (NEB) evaluated, for the first time, the volume of oil in place for the Canol and Bluefish shale formations, located in the territory’s Mackenzie Plain. It found the “thick and geographically extensive” Canol formation is expected to contain 145 billion barrels of oil, while the “much thinner” Bluefish shale contains 46 billion barrels. The report did not estimate the amount of recoverable oil, but points out that even […]

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Oil production forecast for Canada lowered

Canadian petroleum association lowers its forecast for oil production given weak market for crude oil. File photo by Brian Kersey/UPI CALGARY, Alberta, June 10 (UPI) — While demand for Canadian oil remains strong, an industry group said the low price for crude oil forced it to cut its production estimates for 2030. The Canadian Association of Petroleum Producers said it estimated Canadian oil production would reach 5.3 million barrels per day by 2030, up from the 3.7 million bpd produced last year. In June, when crude oil prices were $40 more per barrel, CAPP estimated 2030 output at 6.4 million bpd. "While the two forecasts are similar during the early years of the forecast period, the slower pace of production in the latter years is the result of reduced capital spending intentions due to the sharp decline in global oil prices," the association said. CAPP in May said it […]

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Canadian crude in high demand amid shortages

Brisk demand along with supply disruptions due to Alberta’s wildfires have propelled Canadian heavy crude oil prices to their highest this year. Recent prices for Western Canadian Select heavy crude, a blend of bitumen from the oil sands and conventional heavy oil, reflect an unusually narrow discount to North American benchmark oil. The weakened Canadian dollar has also boosted returns for Canadian producers, even as OPEC holds firm on output to keep world prices low in a bid for more market share. Last month, wildfires in the Cold Lake region of northeastern Alberta forced Cenovus Energy Inc. and Canadian Natural Resources Ltd. to shut down major operations and evacuate staff, cutting bitumen production by a total of 230,000 barrels a day, or about 10 per cent of the province’s oil sands output. “With the forest fires and the shutdown of those projects – though those are starting to come […]

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Canada’s long-term oil output growth slashed 1.1 million b/d: CAPP

The growth in Canada’s heavy and light oil production by 2030 has been revised down 1.1 million b/d, primarily due to the near 50% drop in global prices in the past several months, a senior official at the Canadian Association of Petroleum Producers said Tuesday. "Low prices seem to have taken a toll, and output by 2030 will now be 5.3 million b/d, compared with a forecast of 6.4 million b/d we made last June," said Greg Stringham, CAPP’s vice president for oil sands and markets. "Over the shorter to medium term of five to 15 years, the pace of growth remains consistent. But then we see signs of a slowdown." His comments came after CAPP on Tuesday released its 2015 Crude Oil Forecast, Markets and Transportation annual report. The most hit will be light oil producers in Alberta and Saskatchewan, several of whom have drilled wells but not […]

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Canadian Oil Group Cuts Long-Term Growth Forecast

CALGARY, Alberta—Canada’s long-term crude output will continue to grow, but at a slower pace than previously projected, reflecting a slew of project postponements due to the slump in oil prices, the country’s major energy trade group said Tuesday, The Canadian Association of Petroleum Producers expects Canadian crude output—mostly from Alberta’s oil sands—to reach 4.96 million barrels a day by 2025. That is below its previous estimate of 5.6 million barrels a day and the 6.0 million barrels a day it had forecast back in 2013. CAPP projects crude output this year will reach 3.89 million barrels a day on capital spending of 45 billion Canadian dollars ($36.3 billion). That is slightly above last year’s output of 3.74 million barrels a day on a sharp 40% drop in spending. The lower forecast is the latest sign of a global retrenchment in oil and gas investment that has hit the most […]

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Crude oil shipper settles in Lac-Megantic rail disaster

Miami company that sold crude oil tied to Lac-Megantic disaster in 2013 contributes to multi-million dollar settlement for vicitms. Photo by Steven Frame/Shutterstock MIAMI, June 9 (UPI) — A company tied to the sale of the oil on the train that crashed in Lac-Megantic, Quebec, in 2013 said it agreed to contribute to a settlement for victims. World Fuel Services Corp. said it agreed to contribute about $90 million to a compensation fund for victims of the 2013 derailment as part of a settlement with the Montreal, Maine and Atlantic Railway and its bankruptcy trustees. "We believe that participating in the settlement and contributing to the compensation fund is in the best interests of our shareholders and will also aid in providing closure to those affected by this tragic accident," the company’s chairman and chief executive officer, Michael Kasbar, said in a statement. A World Fuel subsidiary sold the […]

Posted On : Published By : Tom Whipple