Province will ease oil production curtailments; uncertain of effect in lakeland

The province has announced they are easing the oil production limits.

Alberta is increasing production in February and March to 3.63 million barrels per day, which is a 75,000-barrel per day increase from the January limit of 3.56 million barrels per day.

It was reported on Friday that up to 1000 workers in the lakeland area would be out of work due to CNRL shutting-in the ECHO pipeline.

It is uncertain the impact locally at this time.

“We’re not out of the woods yet, but this temporary measure is working. While it hasn’t been easy, companies big and small have stepped up to help us work through this short-term crisis while we work on longer-term solutions, like our investment in rail and our continued fight for pipelines,” said Premier Rachel Notley in a press release this afternoon.

Since the production limits were introduced, government has amended its formula for determining how to allocate space under the production limit. It was determined that starting in February government would use each company’s highest level of production during their best single month from November 2017 to October 2018 as its baseline production level.

It’s not known whether the curtailment formula has changed.

Since the production limit was announced in December 2018, storage levels in Alberta have dropped ahead of schedule, declining by five million barrels to a total of 30 million barrels in storage, the province said.

Analysis based on independent data suggests storage levels have been decreasing roughly one million barrels per week since the start of 2019 and are on track to continue clearing the storage glut that led to unprecedented discounts for Alberta oil in late 2018, the province said.

“I will never stop fighting for Albertans and Canadians to get top dollar for the resources that belong to them. We will adjust these production levels as necessary going forward and we will not waver in our fight for a Made-in-Alberta strategy to build new pipelines, access new markets and add value that creates jobs by upgrading more of our oil and gas here at home,” said Premier Rachel Notley.

More to follow.