The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
CALGARY — The oil patch is getting ready to hibernate.
A darkening commodity outlook for 2016, combined with uncertainties over major pipeline proposals and the looming threat of more stringent environmental rules imposed by governments in Edmonton and Ottawa, is undermining confidence in the sector, setting the stage for deeper cutbacks as companies map out spending plans for next year.
Suncor Energy Inc. late on Tuesday unveiled a bigger budget for 2016, but the company trimmed its production forecast and warned it could chop spending if oil prices continue to sink.
Rival Canadian Natural Resources Ltd. has said it could slash as much as $1.5-billion from its budget next year should conditions deteriorate. And Royal Dutch Shell PLC, which mothballed a major oil sands project last month, has put expansion plans on hold indefinitely while it works to drive down costs at existing operations, the outgoing head of its Canadian division said this week.
“Until the market conditions are right, we will not be putting forward a project,” Lorraine Mitchelmore told The Globe and Mail.
The tepid outlook from the industry’s largest players shows the sector is hunkering down for what promises to be a dismal winter – typically the busiest time of year – as the 18-month slump in energy markets shows no sign of abating.
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