Major Canadian oil companies, which publicly disagreed over the Alberta government’s forced curtailments this year, are in lockstep over how to end the production limits, saying they should be eased as more rail capacity comes online.
Senior executives from
Suncor Energy ,
Canadian Natural Resources ,
Imperial Oil Ltd and
Cenovus Energy said at a TD Securities investor conference in Calgary on Tuesday that they are in talks with Premier Jason Kenney’s Alberta government about how quickly to end the mandatory cuts.
The previous government of Canada's major oil-producing province imposed curtailments in January in a rare step to drain a glut of oil in storage and lift prices. Congested pipelines have caused the Canadian industry's growth to lag that of other countries such as the United States.
"If we could lift production and rail (movement) at the same time, it all kind of makes sense," said Suncor Chief Executive Mark Little. Suncor, which owns both oil production and refining facilities, had opposed the curtailments.
"We've been encouraged by conversations with government," Little said.
The Kenney government, which took office in April, has modestly eased curtailments. It is unclear, however, how soon the province could eliminate government limits on production, said Cenovus CEO Alex Pourbaix, who was one of the industry's strongest voices in favor of curtailment.
There is already significant idle rail capacity that could move crude, according to industry estimates. But ramping up oil-by-rail volumes also requires securing storage space, locomotives, crews and commitments from crude buyers, Pourbaix said.
"It is a real significant piece of work. You’re starting to see people get to the point where you’ll see volumes ramping up," Pourbaix said.
(Reporting by Rod Nickel and Nia Williams in Calgary, Alberta; editing by Jonathan Oatis)