The province of Alberta said on Friday that new conventional oil wells could be drilled without being subject to government production limits, in a bid to increase investment.
The change takes effect immediately, the provincial government said in a statement. The broader curtailment policy remains in effect to hold oil production to levels that can be moved through congested export pipelines.
Alberta introduced mandatory production curbs from Jan. 1 this year to reduce a glut of oil in storage and shore up prices. The provincial government said last week that it would allow companies to produce additional oil if they move it by rail.
“Companies are currently making investment decisions and we want those dollars and jobs to be in Alberta,” Alberta Energy Minister Sonya Savage said.
The province, home to most of Canada’s oil production, has been hurt by layoffs from oil producers such as Husky Energy and oilfield service companies who drill wells.
Canada will see a 10% drop in oilfield wells drilled in 2020, as producers reduce investment, the Petroleum Services Association of Canada (PSAC) forecast last week.
Curtailment still applies to existing producing wells, the government said.
Alberta produced 480,000 barrels per day of conventional crude in September.