Alberta’s government is hoping to encourage oil and gas companies throughout the province to drill new wells.
A Friday release from the province states that effective immediately, any producers who drill a new conventional oil well will not be restricted by production limits for the product it produces
Alberta’s current production limit sits at 3.8 million barrels per day for all types of oil, and has been slowly on the rise since the former premier, Rachel Notley, slowed down oil production in an effort to increase the value of Western Canada Select Oil (WCS).
The curtailment was also due in part to relieve the province’s excess oil stores, which had been nearing capacity.
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According to the new release, Alberta had been producing around 480,000 barrels of conventional oil a day in September, and 90,000 barrels per day were from curtailed operations.
The current exception allowing for the first 20,000 barrels of oil being produced per day exempts most of Alberta’s producers from the curtailment, leaving just 15 of the province’s 300 being subject to production limits.
The news release noted that existing wells producing conventional oil will remain under the curtailment.
“Companies are currently making investment decisions and we want those dollars and jobs to be in Alberta. We are doing everything we can to help,” said Minister of Energy Sonya Savage in the release.
It is estimated that, for every working drilling rig constructed, an additional 145 direct and indirect jobs are supported.