Alberta oil curtailment extended to end of 2020, number of impacted producers reduced

Alberta’s curtailment of oil production is being extended by one year, to the end of 2020, the province announced on Tuesday.

The move comes as a result of continued pipeline delays, including the one-year delay to Enbridge’s Line 3 Replacement Project that was announced in June, the province said.

Line 3 was previously expected to be complete by the end of this year, ending the need for the production limit.

Under the previous government of Premier Rachel Notley, Alberta initially ordered 325,000 bbls/d of oil curtailed in January but has subsequently eased this incrementally. It was set at 125,000 bbls/d for September and has been lowered to 100,000 bbls/d for October.

The province said on Tuesday that “without curtailment, we expect production to exceed takeaway capacity – the amount that can be shipped for export – by about 150,000 barrels per day. By more closely aligning production with takeaway capacity, curtailment is expected to help prevent extreme widening of the light-heavy differential.

“Without curtailment, large discounts for Canadian crude would be projected.”

Alberta has also increased the base limit for curtailment from 10,000 to 20,000 barrels per day, which it says will mean that only 16 of more than 300 producers will be subject to the updated production limits.

“This will allow small producers to increase investment and production, without having a significant impact on overall provincial output,” the government said.

These changes will take effect in October 2019.

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