Canada and the G20 countries agree on the need for oil price stability, but in a Friday meeting Canada did not promise any specific production cuts, Natural Resources Minister Seamus O’Regan said.
The minister also said the federal government would deliver an aid package to provide liquidity to the country’s struggling oil and gas sector “soon.”
Top oil nations pushed to finalize a deal on sweeping oil cuts at G20 talks on Friday, in which O’Regan participated, to lift prices slammed by the coronavirus crisis, with Russia and Saudi Arabia taking the lion’s share and the United States showing unusual willingness to help out.
Riyadh, Moscow and its allies, which make up the informal OPEC+ group, had forged a pact to curb crude production by the equivalent of 10 per cent of global supplies in marathon talks on Thursday, and said they wanted others to cut a further 5%.
In an interview with Russian state television channel Rossiya-24, Russian Energy Minister Alexander Novak said that Canada was ready to cut oil output by around 1 million bpd.
“That’s news to me. I haven’t heard that figure before,” O’Regan told Reuters in a telephone interview.
Referring to curtailment figures, he said: “The exchange of numbers will come at some point, but it did not in this G20.”
The G20 call “was about finding the mechanisms to achieve price stability,” O’Regan told reporters in an earlier teleconference. “We’re not where we need to be yet.”
The western province of Alberta, Canada’s biggest oil producing region, “has already formerly curtailed 80,000 barrels per day,” O’Regan said.
He noted that he did not have the authority to promise curtailment because it is the mandate of provincial governments.
In an email, Artem Abramov, head of shale research for Rystad Energy, said, “Canada’s oil production will be down in April by more than one million bpd for economic reasons anyway.”
Canada is the world’s fourth-largest oil producer, extracting some 4.9 million barrels in February.
Earlier in the day, Prime Minister Justin Trudeau said that efforts to ease the global oil glut should be done in a “concerted” way, without indicating whether the country would limit its own output.
In the interview, O’Regan also said promised aid for struggling energy companies would be coming “soon.”
“We’re going to focus on liquidity,” O’Regan said, without providing any details.
In a statement, Alberta Energy Minister Sonya Savage said the province was “cautiously pleased” to see that OPEC+ had agreed to reduce production by 10 million barrels per day.
“The agreement to implement production limits by OPEC+ brings global energy producers in line with measures that Alberta has reluctantly taken since January 2019,” Savage said.
“For our part, we have already seen Alberta producers voluntarily lower their production and cut their capital spending due to decreased demand because of the COVID-19 pandemic.”
Tim McMillan, the president of the Canadian Association of Petroleum Producers (CAPP), said it will take months for the impact of the COVID-19 crisis to be completely understood.
“While it’s encouraging that there’s an initial agreement to end the irresponsible global oil price war, much damage has been done,” McMillan said in a statement to CBC News.
“The damage to the Canadian energy sector will be longer lasting due to the liquidity crisis triggered by these market manipulations.
“Canada’s oil and natural gas industry’s focus remains on weathering this crisis and working with governments to put into place support that will save people’s jobs in the short term and create the foundation for the economic recovery.”
Speaking to CBC News Network’s Power & Politics, O’Regan said that in conversation with CAPP, he had heard their top priority five times — “liquidity, liquidity, liquidity, liquidity, liquidity.”
“It’s trying to make sure that companies and people who work for those companies are whole, so that when we get out on the other side of this our industry is intact as it can be. That is their top priority,” he said.
“It is all about the viability of those companies and ensuring some certainty for workers and their families.”
O’Regan would not commit to a timeline concerning when federal help for the oil and gas sector would arrive, only offering that it was coming “very soon.”