A total of 75,000 barrels of oil more per day will flow out of Alberta by June of this year.
Following Premier Rachel Notley’s December announcement stating that the province would be slowing its oil production in an attempt to increase its value and deplete its stores, Alberta saw a decrease in oil production by 325,000 barrels per day as of January 1.
- Alberta slowing oil production to drive prices up
- The price of Canadian oil is expected to improve throughout 2019
- $2 billion oil facility being built in Alberta, creating 2,200 jobs
In February, Notley announced that the province would be slightly easing off the reduction, allowing for 25,000 additional barrels to be produced collectively across Alberta by April.
A March announcement — the first to come after the writ was dropped by Notley, calling the provincial election on April 16 — confirms that additional increases of 25,000 will be seen in May and June as well, bringing the total amount of oil produced per day up to 3.71 million by this summer.
The ultimate goal is to see 95,000 barrels per day less than what was being produced prior to the slowdown, and to keep that amount of production consistent until December of this year.
“As we increase production, we’re providing even more certainty for producers who have been working with us to protect the jobs and livelihoods of thousands of Alberta families and businesses,” said Notley, in the release.
“This temporary policy has been critical to reducing the oil price differential while we move ahead with our medium-term plan to ship more oil by rail and lead the long-term charge for new pipelines as we fight to get full value for the resources owned by all Albertans.”
According to the release, storage levels have been trending downward since January, and the price differential between Alberta heavy oil (WCS) and the US mid-continent price (WTI) remains narrow.
It is also noted that warmer spring weather would allow for increased transportation, along with the 120,000 additional barrels per day that are expected to be able to be shipped once Notley’s oil by rail plan is fully operational.
Before the slowdown began, Alberta had been producing 190,000 barrels per day more than what was capable of being shipped, putting a strain on excess oil storage capabilities.
The release also that, due to specifications written into the production limits, the first 10,000 barrels per day that a company produces is exempt from the limit — meaning that only 28 of Alberta’s over 300 oil producers are actually subject to the recently instituted cut back on production.