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Exclusive: CN Rail derailment numbers soared before recent crashes

TORONTO (Reuters) – Canadian National Railway’s safety record deteriorated sharply in 2014, reversing years of improvements, as accidents in Canada blamed on poor track conditions hit their highest level in more than five years, a Reuters analysis has found. Canada’s Transportation Safety Board (TSB) said on Tuesday that track failure may have played a role in CN’s three recent Ontario accidents, which have fueled calls for tougher regulation. The agency said oil unit trains, made up entirely of tank cars, could make tracks more susceptible to failure. Data obtained under access to information laws and analyzed by Reuters shows a broader trend, which has not been previously reported, and could pile more pressure on CN Rail to slow down trains or reduce their length. A crackdown on oil trains could raise the cost of shipping Canadian crude by rail. Trains operated by CN in Canada derailed along main lines […]

Posted On : Published By : Tom Whipple
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Canadian Refiners Set to Buy More U.S. Oil With Wider Discount

(Bloomberg) — Cheaper North American oil is poised to replace West African and Middle East cargoes at eastern Canadian refineries with U.S. crude prices at the lowest level compared with the international benchmark in 14 months. Imports to Canada from outside North America averaged 244,089 barrels a day this month through March 15, down 27 percent from a year earlier, according to New York-based ClipperData, which tracks tanker shipments. Canada, the world’s fifth-largest oil supplier, produces most of its oil in the western province of Alberta and exports it south to the U.S. A lack of pipelines means Canada’s eastern refineries depend on imports by tanker and train. U.S. export “volumes have been growing pretty exponentially,” Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, said by phone Wednesday. U.S. oil is “going to Eastern Canadian refineries and displacing waterborne light crude.” U.S. crude oil […]

Posted On : Published By : Tom Whipple
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Canadian Oil Jobs Cut as Companies Slash Deeper Than 2008

(Bloomberg) — Another round of oil job cuts is rolling through downtown Calgary this week with three producers eliminating at least 650 positions in Canada as they wrestle with prices near a six-year low. ConocoPhillips is the latest, announcing Wednesday it’s terminating 200 people, about seven percent of the Houston-based company’s Canadian workforce. That follows cuts Tuesday by Talisman Energy Inc., which is eliminating 150 to 200 positions in its Calgary head office and Cnooc Ltd.’s Nexen Energy, which is reducing its Canadian headcount by 300. Cutting jobs is one lever energy companies are pulling as they reduce capital spending to adjust to lower cash flow after crude’s 60 percent slide since June. The latest measures add to thousands of jobs lost in Alberta earlier this year as producers slow development of the province’s oil sands, the world’s third-largest proven reserves. “We are seeing pretty aggressive cuts in terms […]

Posted On : Published By : Tom Whipple
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Canadian natural gas E&P outlook weak: analyst

Houston (Platts)–17Mar2015/412 pm EDT/2012 GMT The outlook for Canada’s natural gas exploration and production industry will remain weak over the next several years as boosted US production, high North American stock levels and low prices continue to weigh on the profitability of the industry, the Conference Board of Canada said Tuesday. The dramatic rise in US shale gas production in the last several years, particularly in the Appalachian Basin’s Marcellus and Utica Shale plays has led to a decreased demand for imports of gas from Canada, said Michael Shaw, a CBC economist and co-author of a board study. "I think the US natural gas industry is going to do quite well," Shaw said in an interview. "I think that it doing so well it is going to push out Canadian imports and really hurt the Canadian industry." Canadian gas production, which last year averaged about 14.7 Bcf/d, can be […]

Posted On : Published By : Tom Whipple
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Cnooc’s North American Unit Slashes 13% of Workforce

CALGARY—The North American headquarters of China National Offshore Oil Corp. said Tuesday it would cut about 13% of its workforce due to the slump in global oil prices , raising questions about terms of the Chinese state-owned company’s accord with the Canadian government. Cnooc said wholly-owned Canadian unit Nexen Energy ULC would reduce its 3,200-strong workforce by 400 jobs, including 340 in North America and 60 working for its British unit, to deal with falling revenue from a more than 50% drop in crude prices compared with mid-2014. It also said it would reorganize key business units and slow development on a new oil-sands project in northern Alberta. “In response to the recent industry downturn that has affected all companies in the energy sector, a decision was made to conduct a thorough review of our organization to ensure our long-term viability and sustainability,” Nexen Chief Executive Fang Zhi said. […]

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Canada Crude Falls Below $30; BMO Seeks Oil Sands Cost Cuts

(Bloomberg) — Canadian heavy oil prices fell below $30 for the first time in more than six years as Bank of Montreal warned that oil sands producers must cut costs. Western Canadian Select fell 59 cents to $29.85 at 12:28 p.m. Mountain time, the lowest since Feb. 18, 2009, according to data compiled by Bloomberg. The grade’s discount to U.S. benchmark West Texas Intermediate narrowed 80 cents to $13.60 a barrel. Crude futures settled at a six-year low of $43.88 in New York on concern record supply may strain storage capacity. The cash costs of oil sands producers must shrink to remain competitive in the “new normal of lower oil prices for longer,” BMO analyst Randy Ollenberger said in a note today. The majority of Canada’s crude comes from oil sands in Northern Alberta and is among the most expensive to produce. Companies including Royal Dutch Shell Plc and […]

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Oil-Sands Rules Get Tougher as Alberta Seeks Less Damage

(Bloomberg) — Oil-sands producers will be forced to reduce waste water and to clean up and restore mined land within a decade as Alberta seeks to reduce environmental damage. Regulation announced by Alberta Environment Minister Kyle Fawcett in Edmonton on Friday, include limits on water withdrawals from the Athabasca River in the Canadian province’s north. Companies will also be required to slow the growth of tailings ponds, which hold waste water from bitumen mining, and restore land that existing ones are on after 10 years of the end of the mine’s life, the minister said. Oil-sands operators have come under attack for environmental impact including emissions of greenhouse gas and fresh-water use, helping to stall pipeline construction such as TransCanada Corp.’s Keystone XL. Production of bitumen, forecast to more than double by 2030, is Canada’s fastest-growing source of carbon emissions. The new rules are a more “realistic” policy framework […]

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Western Canadian oil and gas output declines

Historic oil and natural gas production in Northwest Territories in Canada on the decline, federal data show. Photo by Calin Tatu/Shutterstock Oil and natural gas production from frontier prospects in the Northwest Territories is on a steady decline, federal Canadian data show Wednesday. The National Energy Board published data on production from the Norman and Ikhil fields in the Northwest Territories. The regional government estimates the western area may hold as much as 37 percent of the marketable light crude oil in Canada and as much as 35 percent of its gas. NEB said it estimates the region produced 3.9 million barrels of oil and around 2.9 trillion cubic feet of natural gas last year. That’s down around 25 percent for oil and 17 percent for natural gas when compared with production figures from 2010. David Ramsay, the regional minister of industry, told members of the Canadian Parliament last […]

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IMF: Canada squeezed by low oil prices

Low oil prices having secondary impacts on Canadian economy, a review from the International Monetary Fund found. (UPI/Shutterstock/Lilac Mountain) A January report from the IMF found lower crude oil prices would be a drag on investment activity in Canada, with the energy sector bearing the brunt of market trends. In its latest review, the IMF said Canada is facing additional pressures from an "over-heated" housing market and high household debt. Forecasters in January warned the Canadian housing market be slowing as interest rates rise with lower oil prices. Oil-rich Alberta province faces a risk of a "hard landing" in response. "Canada’s overvalued housing market may be cooling off," the IMF’s latest report said. Alberta leaders take up fiscal issues Tuesday when they convene for the start of a new legislative session. Premier Jim Prentice last week said lawmakers need to focus on a sustainable economic model that does away […]

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Alberta Energy Drillers Pivot to Natural Gas as Oil Plunges

(Bloomberg) — Alberta’s energy producers are pivoting toward developing gas reserves rather than oil after crude lost half its value last year. The number of gas development rigs in Canada’s biggest energy producing province almost doubled in December to 157, the most for that month since at least 2010, the Alberta Energy Regulator said in data posted on its website late Wednesday. The number of crude development rigs fell by 4.3 percent to 134. Alberta’s gas prices dropped 35 percent last year while oil fell 46 percent. U.S. crude prices have plunged below $50 from last year’s high above $107 after the Organization of Petroleum Exporting Countries resisted calls to cut output amid a surge of U.S. crude production. While most conventional petroleum rigs in Alberta produce both gas and oil, the collapse of crude prices is prompting drillers to focus on wells with higher gas volumes, Mark Oberstoetter, […]

Posted On : Published By : Tom Whipple