Archive | Oil and Gas Sector-Politics and Image

Crude’s collapse sends shockwaves across global markets – by Samuel Potter (Bloomberg News/Financial Post – November 14, 2018)

Investors have gone from contemplating the prospect of oil at US$100 to sub-$50 in less than two months

Investors have gone from contemplating the prospect of oil at US$100 to sub-US$50 in less than two months. No wonder global markets are playing catch-up.

From stocks and bonds to currencies, assets worldwide are gripped by a crude awakening. Monday saw oil’s largest one-day drop in three years, securing its longest losing streak on record.

Early trading jitters on Wednesday suggested the sell-off may not be over, though West Texas Intermediate later climbed after OPEC President Suhail Al Mazrouei said the group and its allies would do what is needed to balance the market. Continue Reading →

BHP’s ‘measured creep’ of risk appetite – by Matthew Stevens (Australian Financial Review – November 11, 2018)

Ivan Glasenberg wondered recently how it was the BHP had moved into mining frontier of Ecuador when management at Australia’s Smart Thinking resources house was supposedly content to sustain and grow its business around its existing sites. This bemusement is well founded.

Among the themes consistent through Andrew Mackenzie’s evolving reformation of BHP are that it has little or no appetite for investment in frontier opportunities and that the company’s growth aspirations will be best afforded through a laser focus on the Global Australian’s existing six-strong fleet of mega-resource basins.

But that message is in the process of being massaged into something more nuanced, and not just because BHP’s two-stream play to possibly shape Ecuador’s future in copper stands an obvious test of the past house line in emerging mining sovereignties. Continue Reading →

Active participants: A new study finds greater native involvement in resource projects – by Greg Klein (Resource Clips – November 7, 2018)

Trans Mountain—it’s likely been Canada’s biggest and most discouraging resource story this year. The subject of well-publicized protests, the proposed $9.3-billion pipeline extension met federal court rejection on the grounds of inadequate native consultation.

But any impression of uniform aboriginal opposition to that project in particular or resource projects in general would be false, a new report emphasizes. In fact native involvement increasingly advances from reaping benefits to taking active part, with corresponding advantages to individuals and communities.

That’s the case for the oil and gas sector, forestry, hydro-electricity and fisheries, with mining one of the prominent examples provided by the Montreal Economic Institute in The First Entrepreneurs – Natural Resource Development and First Nations. Continue Reading →

On the Frontier: Teck advances milestone new oilsands mine in a new era of energy development – by Deborah Jaremko, Jim Bentein and Nelson Bennett (JWN – November 6, 2018)

Work that challenged the established borders of Alberta’s bitumen resource led to the development of Teck’s proposed Frontier oilsands mine. Now the company’s decision to move Frontier through the regulatory process is challenging the view of some that the oilsands is in sunset mode.

Teck is Canada’s largest diversified mining company, with operations worldwide that produce primarily copper, metallurgical coal and zinc. It has total assets worth more than $36 billion and more than 13,000 employees. It is a major force on the global mining scene, but new to the oilsands space.

Teck officially became an oilsands producer earlier this year when the Fort Hills mine went into commercial service, but the company has been advancing its oilsands interests for more than a decade. The miner owns 21.13 percent of Fort Hills along with operator Suncor Energy (54.11 percent) and Total SA (24.58 percent). Continue Reading →

The First Entrepreneurs: Income of First Nations with resource deals exceed national averages – by Geoffrey Morgan (Financial Post – November 6, 2018)

The report found that First Nations people working in the mining sector
had a median 2016 annual income of $91,572, double the nationwide First
Nations median of $43,812 per year, and well above the $53,648 per year
for non-Indigenous people.

Similarly, First Nations members working in the oil and gas sector earned
close to three times the average personal income of First Nations people
across the country, earning an average of nearly $150,000 in 2016,
compared with $51,500 outside the industry.

Reconciliation is not just atoning for past misdeeds but there also needs to be economic reconciliation, according to the Montreal Economic Institute

CALGARY — A dramatic change in First Nations’ approaches to natural resources development has led, in certain cases, to rising incomes in Indigenous communities where members now out-earn national averages.

The Montreal Economic Institute found in a study released Tuesday that First Nations communities and members involved in resource development earn multiples of what both Indigenous and non-Indigenous people earn in other industries. Continue Reading →

Another Canadian oil company flees Trudeau and Notley for the U.S. – by Ted Morton (Financial Post – November 6, 2018)

Encana is only the latest example of the exodus of capital since 2015

Encana’s announcement last week that it was acquiring Texas-based Newfield Exploration may be good news for the Calgary-based company, but it is not good news for Canada. It is the most recent chapter in an unfolding story of capital flight from the Canadian energy sector.

First the big internationals, and now Canadian-based firms like Encana, are moving their operations and/or capital budgets out of Canada and relocating their money to the U.S. and elsewhere. And it’s no mystery why. Thanks to government policies adopted by the governments of Prime Minister Justin Trudeau and Alberta premier Rachel Notley since their respective elections in 2015, Canada has become a less and less competitive place to invest and do business.

EnCana’s $7.7-billion deal for Newfield’s oil assets is its most recent U.S. acquisition. Encana had already made significant new investments in the U.S. in the Permian and Eagle Ford fields over the past three years. Continue Reading →

Canadian oil output to hit nearly 7 million bpd despite pipeline constraints: NEB – by Geoffrey Morgan (Financial Post – November 1, 2018)

Canadians will use less oil and gas in the future, while pumping more of it than ever before

CALGARY – Canadians will use less oil and gas in the future, while pumping more of it than ever before, a new report from the National Energy Board shows. Canada’s energy and pipeline regulator released its annual energy and power forecast on Wednesday, which painted a divergent picture of the country’s supply and demand for energy wherein the country continues to produce more and more energy while using less.

The report is a forecast of oil, natural gas, nuclear and renewable power sources over time and shows that “Canada is becoming more energy efficient,” NEB chair Peter Watson said during a speech to the Toronto Board of Trade.

The report, titled Canada’s Energy Future, forecasts domestic oil production will grow by 58 per cent and natural gas production will grow 29 per cent between now and 2040, while domestic energy demand grows by just 5 per cent – or less. Continue Reading →

What would it cost to clean up Alberta’s oilpatch? $260 billion, a top official warns – by Mike De Souza, Carolyn Jarvis, Emma Mcintosh and David Bruser (Toronto Star – November 1, 2018)

Cleaning up the Alberta oilpatch could cost an estimated $260 billion, internal regulatory documents warn. The staggering financial liabilities for the energy industry’s mining waste and graveyard of spent facilities were spelled out by a high-ranking official of the Alberta Energy Regulator (AER) in a presentation to a private audience in Calgary in February.

The estimated liabilities are far higher than any liability amount made public by government and industry officials. The official, Rob Wadsworth, Vice President of Closure and Liability for the AER, says a “flawed system” of industrial oversight is to blame.

He called on all stakeholders to accept tougher regulations and move away from a system that now allows the largest companies to take centuries to clean up their toxic well site graveyards. Continue Reading →

What discount? Gulf Coast paying premium prices for Canadian oil — but only 450,000 bpd make it there – by Geoffrey Morgan (Financial Post – October 26, 2018)

CALGARY — While most Canadian oil is being sold at a huge discount to U.S. benchmarks, barrels that can find their way to the prized Gulf Coast market are securing international prices — and even selling at a premium on some days.

A barrel of Western Canada Select at the oil price hub of Hardisty, Alta., traded for US$19.49 on Wednesday for December delivery. But the same barrel of heavy Canadian oil is fetching US$64.74 in Houston, near the West Texas Intermediate benchmark price of US$66.44, AltaCorp Capital analyst Nicholas Lupick said.

“We’re not even talking about a different barrel,” Lupick said, explaining that the WCS Canadian blend is trading at two different prices depending on whether it’s sold in Alberta or Texas. Continue Reading →

This Liberal bill will hurt Canada and Canadian workers – by Chris Bloomer, Timothy M. Egan, Chris Gardner, Gary Leach, Bob Masterson, Tim McMillan, Tom Whalen and Wendy Zatylny (National Post – October 25, 2018)

Opinion: We were promised legislation that would restore public trust, ensure fair processes and get resources to market. Bill C-69 falls short

The LNG Canada announcement that its liquified natural gas project at Kitimat, B.C., will move forward is a great story for Canada and shows how complex and important Canadian resource development is to our country. It also shows that our current environmental impact assessment process works to protect our precious natural environment.

But, stories like this will become few and far between, especially if the impact assessment process proposed in the current Bill C-69 is passed and implemented.

Middle-class Canadians across the country who are hoping for similar projects and the many direct and indirect job opportunities that flow from them should know that Canada is developing a reputation as a high-risk place to do business. Bill C-69, if passed in its current form, will make this reputation much, much worse. Continue Reading →

Column: Why can’t Ottawa get Indigenous consultation right? – by Elmira Aliakbari and Ashley Stedman (Calgary Herald – October 22, 2018)

Elmira Aliakbari is associate director of natural resource studies and Ashley Stedman is a senior policy analyst at the Fraser Institute.

After weeks of consideration, the Trudeau government recently said it would not appeal the Federal Court of Appeal’s decision to quash the approval of the Trans Mountain pipeline expansion, and would instead further consult Indigenous groups for an undetermined amount of time.

It seems the government’s approach to Indigenous consultation is try and try again. This time, the government hopes that appointing former Supreme Court justice Frank Iacobucci to oversee the consultation process will get the process “right.” Remember, this latest move comes after the government sought “deeper consultations with Indigenous peoples” in 2016.

Undoubtedly, conducting meaningful consultations with Indigenous communities is important. However, a trial-and-error approach is fraught with uncertainty and potential delays. But there’s another way. Instead of this flawed approach reliant on judicial interpretations, the government can pass legislation to better define what “duty to consult” actually means. Continue Reading →

Canadians are suckers. Just look at our oil exports – by Kelly McParland (National Post – October 16, 2018)

We could all pat ourselves on the back if we were serving the environment and the greater good of a sustainable earth. But no, we’re not

If you haven’t been reading the business pages, you might not know that Canadian ingenuity has developed a stunning new business model: producing expensive oil and giving it away cheap.

The gap between Canadian and U.S. oil is nudging US$50 a barrel. Alberta gets around US$26 a barrel, while West Texas Intermediate is in the neighbourhood of US$72. The discount is so juicy that China has started switching away from Venezuela towards bargain-basement Canada. That tells you something — even claptrap, broken down, corruption-riddled Venezuela can’t undersell Canada’s sad-sack inability to peddle its oil.

If the brainy entrepreneurs who figured out how to extract a valuable commodity from Alberta’s challenging oilsands had known the result would be treated like a loss-leader at Walmart, they might have directed their creativity elsewhere. Most countries recognize that natural limits on resource supplies dictate that they be husbanded carefully, for maximum advantage. Continue Reading →

Saudi Arabia Breaks 45-Year Taboo With Veiled Oil Weapon Threat – by Javier Blas (Financial Advisor/Bloomberg – October 15, 2018)

For 45 years, it’s been considered out of bounds for Saudi Arabia. But all of a sudden, Riyadh made what many read as a veiled threat to use the kingdom’s oil wealth as a political weapon — something unheard of since the 1973 Arab embargo that triggered the first oil crisis.

Saudi Arabia, the world’s biggest oil exporter, said on Sunday it would retaliate against any punitive measures linked to the disappearance of Washington Post columnist Jamal Khashoggi with even “stronger ones.”

In an implicit reference to the kingdom’s petroleum wealth, the statement noted the Saudi economy “has an influential and vital role in the global economy.” Continue Reading →

Price of Canadian heavy oil hits 10-year low compared with benchmark WTI crude – by Shawn McCarthy (Globe and Mail – October 6, 2018)

The price of Canadian heavy oil has hit a 10-year low compared with benchmark North American crude as a shortage of pipeline capacity and refinery maintenance have combined to cause a growing glut of crude in Alberta.

Lack of space on pipelines to transport the product will dog the industry, at least until Enbridge Inc. can complete its Line 3 replacement project in late 2019, analysts said on Friday. The steep discounts could ease later this fall as planned maintenance at U.S. refineries comes to an end. Expanding rail capacity will also help relieve the bottlenecks.

Alberta Premier Rachel Notley complained this week that widening price differentials are costing Canadian producers and governments upward of $40-million a day. Continue Reading →

‘Thought I was dead for sure’: Worker recalls escape from Irving Oil explosion (Canadian Press/Globe and Mail – October 9, 2018)

First, Jonathan Wright heard a loud hissing. Then he was thrown to the ground and turned to see a wall of orange, as flames surrounded him and several other workers after a massive explosion at the Irving Oil refinery in Saint John, N.B., on Monday morning.

The American contractor said his workspace was approximately 35 metres from the blast – and the only stairway out was blocked by flames. “You could not see anything besides smoke and flames,” Wright said. “I thought we were done right there.”

Wright told his story Tuesday, as the refinery regrouped from the Thanksgiving Day explosion which shook the historic port city shortly after 10 a.m. local time and injured at least four workers. Continue Reading →