Sunday , October 17 2021

Imperial Blows Albert's Dramatic, Dramatic Oil Reduction That Has Made Raw Rail



CALGARY – Imperial Oil Ltd. blown up the Alberta government Friday to force companies to reduce oil production in the province, calling for a "dramatic, dramatic manipulation of the market" that made rough rail freight.

With a pen stroke, the government started winners and losers

Rich Kruger, Executive Director of Imperial Oil

"We think investors' confidence in Canada is being damaged at a time when we already had trust in Canada," said Executive Director Richard Kruger, adding a restriction order that Imperial has reconsidered the $ 2.6 billion Aspen oilands project, the green light last year.

Rich Kruger, Executive Director of Imperial Oil

Postmedia

Alberta's Prime Minister Rachel Notley announced in December that large oil producers should increase production by 325,000 barrels a day to raise Western Canada. Choose heavy oil prices, which at that time were a distorting US dollar 40- barrel discount compared to the US criteria.

Imperial, which has invested in refineries that can benefit from the difference between heavy blends and petrol or diesel prices, opposed the order as well as integrated companies like Suncor Energy Inc. and Husky Energy Inc.

"With a pen stroke, the government began to win the winners and losers," said Kruger, adding that the reduction affects 28 of the 421 provincial manufacturers.

Most importantly, he said the restriction order would have unintended consequences for maintaining more oil storage, as companies like Imperial would send less rail cars.

Canadian oil companies need a discount of $ 15 a barrel and $ 20 a barrel to justify the cost of rail transportation by rail, but the discount is lower than this range since the order comes into force.

On Thursday, AltaCorp Capital data show that the discount between WCS and West Texas Intermediate is on average $ 9.44 per barrel.

Before the entry into force of the reduction order, Imperial sent about half of the total volume of untreated rail cars from Canada. In December, it delivered 168,000 bpd to the rails, but since then it has "solved" the threshold.

In January, the company sent an average of 90,000 bpd to the rails, and in February it is expected that zero-barrel will be delivered on rail cars.

"The untreated railways should help reduce this situation in the province, but the harsh, dramatic market manipulation makes idling power idle now," Kruger said.

Mike McKinnon, spokesman for Albert McQuaig-Boid, Energy Minister of Alberta, said on Friday: “The decision to temporarily limit oil production was applied fairly and fairly, and this has been an important factor in saving jobs in the energy sector.

"We expect the difference to take place at a more sustainable level, and we continue to move forward with long-term solutions, such as our railroad investments and our ongoing struggle for pipeline construction," he said.

Many oil companies in Calgary, without oil refineries, supported the decision to reduce oil production to raise WCS prices, and thus provincial government royalties.

"When we made the decision to cut, we knew from the beginning that it was a big decision, it was a brave decision, and it was tough because not everyone agreed," the notary of Notley this week.

On Wednesday, the province eased the redemption order by 75,000 bpd, saying the order has reduced crude oil in the province by 5 million barrels to 30 million barrels.

However, Kruger said the restriction order had shaken his confidence in the market because there was no guarantee that a similar order could not be issued again.

"We are reassessing our assumptions," said Kruger, adding that the company's 75,000 bpd Aspen oilands project schedule could be revised to order.

However, the company was unable to restore its planned capital expenditure for 2019 on a Friday call.

"As one of the few Canadian companies that increase spending in 2019, Imperial is likely to benefit from its counter-cyclical strategy as it seeks cost improvements for major projects," Travis Wood, a financial analyst at the National Bank, pointed out in a study note.

He noted that Imperial's fourth quarter results outperformed analysts' expectations, mainly due to its refining assets.

Imperial earned $ 853 million in the 2018 quarter, a dramatic 990% improvement compared to $ 137 million net loss in the same period last year.

These improved revenues were only slightly higher due to the fact that Imperial's total oil and gas output in the fourth quarter averaged 431,000 barrels of oil equivalent per day, which is 8% more than 399,000 boe / d at the same time pumped. 2017

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