Canadian companies among few to cut oil production in face of low prices

CALGARY -- Consultancy Wood Mackenzie says Canadian oil producers are among the very few globally who have reduced output in the face of low oil prices.

See Full Article

Wood Mackenzie says it found that only about 100,000 barrels a day -- or 0.1 per cent of global production -- has been cut as oil trades below US$35 a barrel, even as 3.4 million barrels of production is unprofitable at that price.

About 30,000 barrels of that production cut has come from older conventional and heavy oil wells in Canada, with the rest from ultra low-output wells in the United States and some aging offshore wells in the United Kingdom's North Sea.

But while Canada represents about a third of the reduced output, it accounts for more than half of unprofitable global production due to high costs and lack of access to markets.

Wood Mackenzie estimates that 2.2 million barrels a day of Canadian production is operating at a negative cash cost when oil is at US$35 a barrel, meaning more than half of Canada's total output of about 3.9 million barrels a day is currently unprofitable.

Much of that unprofitable production is coming from the oilsands, but Wood Mackenzie says that because of the costs and complexity of shutting down bitumen production, operators are reluctant to reduce output.

"Given the cost of restarting production, many producers will continue to take the loss in the hope of a rebound in prices," said Robert Plummer, vice-President of investment research at Wood Mackenzie.

Other producers who have entered negative cash cost territory include Venezuela with about 230,000 barrels a day of unprofitable production, the U.K. with about 220,000 barrels, and the U.S. with some 190,000 barrels.

The tight oil production from the U.S. that helped spur the glut of global production only starts to become cash negative below US$30 a barrel, Wood Mackenzie said.



Advertisements

Latest Economic News

  • Bogus bongs or bogus lawsuits? Pipe maker sues over fakes

    Economic CTV News
    FORT LAUDERDALE, Fla. -- Don't want to bum your buzz, but that expensive bong you got cheap to smoke your pot may be bogus. High-end German glass water pipe maker Roor and its American licensee are filing lawsuits against smoke shops and mom-and-pop convenience stores in Florida, California and New York. Source
  • 'There isn't a best card out there': How to choose a credit card that works for you

    Economic CBC News
    Credit cards are sometimes lambasted as high-cost consumer debt that can quickly get borrowers into trouble. But if you pay off the balance each month, credit cards can also have significant perks. Loyalty programs like Air Miles, which has both a standalone program and partnerships with credit cards, have drawn a lot of criticism lately, but Canadians are still attached to credit cards that offer rewards. Source
  • Chevron says it has won the latest round in an Ecuadorian legal battle

    Economic CTV News
    Oil giant Chevron Corp. says it has won a round in the Canadian courts in a complex legal battle with a group of Ecuadorian villagers who are trying to collect on a massive judgement they won in Ecuador's courts. Source
  • Liberals ask President Trump to approve Keystone XL pipeline

    Economic CTV News
    Canada’s natural resources minister says that he hopes the new U.S. administration will allow the Keystone XL pipeline quashed by Barack Obama to proceed, noting that all Canadian regulatory approvals are in place. Jim Carr spoke to CTV’s Power Play from Washington, D.C. Source
  • Apple depicts Qualcomm as a shady monopolist in US$1B lawsuit

    Economic CTV News
    SAN FRANCISCO -- Apple is suing mobile chip maker Qualcomm for $1 billion in a patent fight pitting the iPhone maker against one of its major suppliers. The 100-page complaint filed Friday in a San Diego federal court depicts Qualcomm as a greedy monopolist abusing its power in a key segment of the mobile chip market to extort royalties for iPhone innovations that have nothing to do with Qualcomm's technology. Source
  • Trump's 'America first' tone worries head of Canadian oil and gas industry group

    Economic CTV News
    Trump takes charge: Sworn in as 45th president of the U.S.A. Source
  • Obama administration urges Canada to reverse Super Bowl ad decision

    Economic CTV News
    OTTAWA - In one of its final communications with Canada, the outgoing Obama administration is engaging in pigskin politics: asking the Trudeau government to overturn a regulation affecting ads during the Super Bowl. The U.S. Source
  • Oil and stock prices higher as Donald Trump sworn in

    Economic CBC News
    Stock markets responded to the first day of the Trump Administration in a largely positive way, with the Dow Jones, the Nasdaq and the S&P 500 all higher on the day of his swearing in. The Dow Jones Industrial Average was up by nearly 100 points to 19,829 just minutes before the new president formally acceded to the position. Source
  • Stocks higher as Donald Trump lays out glimpse of future economic policies

    Economic CBC News
    Stock markets responded to the first day of the Trump Administration in a largely positive way, with the Dow Jones, the Nasdaq and the S&P 500 all higher on the day of his swearing in. The Dow Jones Industrial Average was up by nearly 100 points to 19,829 just minutes before the new president formally acceded to the position. Source
  • Stocks close higher as Donald Trump lays out glimpse of future economic policies

    Economic CBC News
    Stock markets responded to the first day of the Trump Administration in a largely positive way, with the Dow Jones, the Nasdaq and the S&P 500 all higher on the day of his swearing in. The Dow Jones Industrial Average was up by nearly 100 points to 19,829 just minutes before the new president formally acceded to the position. Source