Cold Lake energy giant wants government hands out of oil market
A major oil company with operations in the Lakeland is responding to the province’s decision to slow the flow of Alberta crude. Premier Rachel Notley announced on December 2nd that a temporary 8.7 percent cut in production will come into effect on New Years Day. The cut is an attempt to close the gap between prices of Western Canadian Select crude oil and its West Texas Intermediate and Brent crude oil cousins.
Imperial Oil, whose Cold Lake operations produce about 160,000 barrels of bitumen a day, said in a statement that it doesn’t agree with slowing down.
“We recognize the market challenges currently facing our industry, however, we respectfully disagree with the decision taken by the Alberta government to order mandatory production curtailment. As we have previously stated, government intervention in the form of a mandatory production curtailment carries significant risks in terms of unintended consequences.”
“Our view remains that free markets work and intervention carries trade risks and sends a negative message to investors about doing business in Alberta and Canada. Unfortunately, this intervention appears not to recognize the investment decisions companies have made to access higher value markets. Imperial has increased its takeaway ability by securing contractual capacity in existing pipelines and by investing in extensive rail infrastructure that allows the company to reach higher value markets, to the benefit of all Albertans.”
The statement ends with Imperial saying they will be looking at impacts on their operations and working with the province “to minimize unintended consequences of this action.” Premier Notley says the cuts will stay in effect until the backlog of oil is shipped out in the spring.