Oil Price Crisis: $0 Oil Forces Canada To Shut Down Crude Production

Hamilton Nwosa
Writer

Ad

NUPENG dues is N7,000 not N54,000, By Owei Lakemfa

By Owei Lakemfa I have, given my experience as a retired labour leader, journalist, patriot and human rights activist, risen in the last few weeks to defend the fundamental rights of workers in the oil industry. I did this because I cannot fold my hands as Dangote Plc dumps huge funds on the mass and…

Ranked: Gas Prices Around the World in 2025

Key Takeaways Fuel prices in Hong Kong rank as the highest globally, at $3.07 per liter in 2025. Several European cities rank among the world’s most expensive for gasoline, driven by energy supply shocks. Riyadh, Saudi Arabia has seen the fastest price increase since 2020 across 69 cities analyzed, with fuel costs up nearly 49%.…

Oil Prices Edge Higher After Steep Two-Day Selloff

Oil prices recovered slightly in early Asian trading on Wednesday after two straight sessions of steep declines, as traders weighed the prospect of a larger OPEC+ output increase against signs of tighter U.S. crude inventories. At the time of writing, Brent futures for December delivery had climbed to $66.17 while WTI was trading at $62.50, up 0.21% on the…

Ad

By Irina Slav

Canadian oil companies have begun shutting down steam-driven oil sands production projects as prices continue to fall, Reuters reports noting the move could have dire long-term consequences for the production facilities. Steam-driven oil sands production, also called steam-assisted gravity drainage, involves injecting steam into an oil sands deposit to melt the bitumen and make it flow up the well. To ensure long-term production, the temperature and pressure at such sites must be maintained at a certain level. Disruption, Reuters explains, could result in permanent damage, which would translate into a permanent loss of production.

Yet Western Canadian Select, the heavy oil benchmark of Canada, has been trading  below $10 for about ten days now, with a temporary spike to $10.13 a barrel last Thursday. At the time of writing, WSC was trading at $-0.01 a barrel.  As a result, producers are being forced to cut. Husky Energy cut its oil sands output by 15,000 bpd. Cenovus reduced its production by 45,000 bpd and said it could raise this further to 100,000 bpd, nothing a cut of this size wouldn’t damage the bitumen reservoirs. ConocoPhillips last week said it would cut its oil sands output by as much as 100,000 bpd.

Earlier this month, ahead of a meeting between Alberta government officials and OPEC, the chief executive of Enbridge said Oil  producers in Western Canada could shut down as much as 20-25 percent of production in response to the price slide, brought about by the coronavirus outbreak that exacerbated the situation with the supply overhang. A cut of 20-25 percent translates into 1.1-1.7 million bpd. According to TD Securities, 135,000 bpd of this has already been cut, all in the oil sands, as of April 7. Now, the consultancy says that total production cuts in the oil sands amount to 300,000 bpd and could rise further to 1.5 million bpd.

*Irina Slav’s piece was originally published in Oilprice.com

 

Ad

Unlocking Opportunities in the Gulf of Guinea during UNGA80
X whatsapp