Province’s oil curtailments means layoffs

[coreya3212]

Originally Posted by elkhunter11

Our premier made it very clear that she was anti oil, when she was protesting pipelines before she was elected. Then she attacked the oil industry with a delayed royalty review, and then a carbon tax. Only when it became apparent that she would have to appear to be pro pipeline to have any chance of re-election did she pretend to be pro pipeline. She could have played hardball with Horgan, but instead she made idle threats and delayed acting long enough for the federal government to step in and put an end to Trans Mountain. And of course she now blames the federal government, in an attempt to appear that she is fighting for Alberta. Anyone with a clue knows that the Trans Mountain commercials are nothing but a waste of money, but with an election coming, she is doing everything she can, to try and buy votes. As it stands, even more energy jobs will be lost, and it will only get worse before it gets better, which can only happen if both upcoming elections result in changes of government.

And a close second.

IBTL by the way

[dgrimard]

Originally Posted by ESOXangler

I agree but its unconstitutional and the supreme would vote it down.

saw Drewski mention this earliers up in the thread

The N.W.T has a pay role tax for anyone not a current territory citizen, it isn't much but it is on every paycheck as a deduction.

[Talking moose]

Originally Posted by elkhunter11

Our premier made it very clear that she was anti oil, when she was protesting pipelines before she was elected. Then she attacked the oil industry with a delayed royalty review, and then a carbon tax. Only when it became apparent that she would have to appear to be pro pipeline to have any chance of re-election did she pretend to be pro pipeline. She could have played hardball with Horgan, but instead she made idle threats and delayed acting long enough for the federal government to step in and put an end to Trans Mountain. And of course she now blames the federal government, in an attempt to appear that she is fighting for Alberta. Anyone with a clue knows that the Trans Mountain commercials are nothing but a waste of money, but with an election coming, she is doing everything she can, to try and buy votes. As it stands, even more energy jobs will be lost, and it will only get worse before it gets better, which can only happen if both upcoming elections result in changes of government.

Eggsactly!!!!

[chasingtail]

Originally Posted by elkhunter11

Our premier made it very clear that she was anti oil, when she was protesting pipelines before she was elected. Then she attacked the oil industry with a delayed royalty review, and then a carbon tax. Only when it became apparent that she would have to appear to be pro pipeline to have any chance of re-election did she pretend to be pro pipeline. She could have played hardball with Horgan, but instead she made idle threats and delayed acting long enough for the federal government to step in and put an end to Trans Mountain. And of course she now blames the federal government, in an attempt to appear that she is fighting for Alberta. Anyone with a clue knows that the Trans Mountain commercials are nothing but a waste of money, but with an election coming, she is doing everything she can, to try and buy votes. As it stands, even more energy jobs will be lost, and it will only get worse before it gets better, which can only happen if both upcoming elections result in changes of government.

No kidding, how anyone can believe that Notley and the NDP actual want a pipeline is beyond me. Spend your life protesting pipelines and we are now to believe your pro-pipeline, give me a break.

[Bigwoodsman]

Originally Posted by Drewski Canuck

I said it once, I said it twice, I will say it again.

Alberta Infrastructure Tax on Non resident income. WHY??? Provincial Income Tax is being paid in BC, Ontario, Quebec, on income earned in Alberta.

I could walk naked down Jasper Avenue painted green with Neon Signs on my head trying to point out the fact that the VERY PROVINCES THAT ARE WRECKING ALBERTA ARE TAKING THE BENEFIT OF ALBERTA WAGES EARNED BY THEIR CITIZENS, but no one will listen.

Cutting production from Alberta will do little for marketing Alberta Oil at World Prices, when Eastern Canadians themselves would rather buy foreign Oil at World Price over getting discounted ALBERTA OIL.

Eastern Canada knows that the "Carbon Footprint" of tanker delivered Oil is alot higher than the "Carbon Footprint" of a Pipeline, so don't fall for the hypocrisy of the "Dirty Oil" argument.

Instead, we should FIGHT BACK with a hefty surcharge on the Non Resident Income Earners. The Provincial Tax Revenue will be better off for it, and if BC, Ontario, and Quesbec do not like it, they can send their Citizens somewhere else to work.

Drewski

No one will listen because its a damn good idea!

No politician will ever listen to the electorate ever. They all know what is best for us.

BW

[fish_e_o]

It states: “The current baseline for determining monthly allowable production is being amended to better account for operators who had made significant recent investment and were in the process of increasing production at the time of the government’s announcement of curtailing production.

i guess investing in Alberta pays.

honestly screw these guys for cutting production before hand

[Map Maker]

I don’t quite get it.
Some the companies can’t produce enough now with the curtailment to justify the work and wages.
But what about the increased profit they are making on the increased price? Why so hush-hush about that.

This reminds me of one morning, front page news of Schlumberge laid off 2000 workers saying the decline in oil prices caused the layoffs. Then in the business section same day, says schlumberge raises dividend by 30%.

Seems like everyone is a crook.

Just read the news of Vale’s dam burst in Brazil. Unbelievable these things happen nowadays.

[elkhunter11]

Originally Posted by Map Maker

I don’t quite get it.
Some the companies can’t produce enough now with the curtailment to justify the work and wages.
But what about the increased profit they are making on the increased price? Why so hush-hush about that.

This reminds me of one morning, front page news of Schlumberge laid off 2000 workers saying the decline in oil prices caused the layoffs. Then in the business section same day, says schlumberge raises dividend by 30%.

Seems like everyone is a crook.

Just read the news of Vale’s dam burst in Brazil. Unbelievable these things happen nowadays.

They are producing less oil, so they can shut down some equipment, which means they need less employees to run the equipment. They aren't going to keep people on staff, that they don't need, it's really that simple.

[AndrewM]

Originally Posted by Map Maker

I don’t quite get it.
Some the companies can’t produce enough now with the curtailment to justify the work and wages.
But what about the increased profit they are making on the increased price? Why so hush-hush about that.

This reminds me of one morning, front page news of Schlumberge laid off 2000 workers saying the decline in oil prices caused the layoffs. Then in the business section same day, says schlumberge raises dividend by 30%.

Seems like everyone is a crook.

Just read the news of Vale’s dam burst in Brazil. Unbelievable these things happen nowadays.

There are very few companies that will keep employees if they aren't working as it is hard to justify it to the shareholders.
Here is another example: Assume you own a company that has two shops fully staffed and have to close one of the shops down as it isn't making any money. The first shop was making money so by shutting in the second you would make more money. You would be forced to let the employees go rather than paying them to do nothing.

[Jim Blake]

[QUOTE=Map Maker;3922134]I don’t quite get it.
Some the companies can’t produce enough now with the curtailment to justify the work and wages.
But what about the increased profit they are making on the increased price? Why so hush-hush about that

True enough...but. This came in the First of January. Then the Govt. changes the formula. Lots to decipher and lots of decisions to be made in a short time with moving rules. Changing production rates in the volumes CNRL et al are talking requires some major changes in staffing and well production strategy.

It depends if the Companies were locked into a contract at a higher differential. I am sure most Companies were not totally on Spot Pricing, especially with the history of volatility.

[AndrewM]

[QUOTE=Jim Blake;3922139]

Originally Posted by Map Maker

I don’t quite get it.
Some the companies can’t produce enough now with the curtailment to justify the work and wages.
But what about the increased profit they are making on the increased price? Why so hush-hush about that

True enough...but. This came in the First of January. Then the Govt. changes the formula. Lots to decipher and lots of decisions to be made in a short time with moving rules.

It depends if the Companies were locked into a contract at a higher differential. I am sure most Companies were not totally on Spot Pricing, especially with the history of volatility.

Not many companies lock in their differentials. Most will have a portion of sales locked in. Lock one without the other and they pinch each other. I am sure a most are starting to lock the differentials!

[AndrewM]

Companies may be making more but if the big guys can't reinvest their capital without shutting in more wells, then the reinvestment gets pulled out of Alberta.

[Jim Blake]

[QUOTE=AndrewM;3922141]

Originally Posted by Jim Blake

Not many companies lock in their differentials. Most will have a portion of sales locked in. Lock one without the other and they pinch each other. I am sure a most are starting to lock the differentials!

I didn't phrase it right. They lock in a specific price of oil for a period of time. I've never heard of locking in differentials.

What I meant was the Companies probably had a bunch of oil locked in at a low price in comparison to what WTI was trading for. Ergo they are locked in and cannot take advantage of the present differential.

[AndrewM]

Originally Posted by Jim Blake

I didn't phrase it right. They lock in a specific price of oil for a period of time. I've never heard of locking in differentials.

What I meant was the Companies probably had a bunch of oil locked in at a low price in comparison to what WTI was trading for. Ergo they are locked in and cannot take advantage of the present differential.

Companies are starting to look at it more due to the pinching affect. Lock in a price then differentials rise like last year and your profit can go negative in a hurry. If you lock in a price you take advantage of the current low differentials. Most companies lock in WTI price rather than a WCS one.
WTI-Differentials=WCS price

[Jim Blake]

[QUOTE=AndrewM;3922151]

Originally Posted by Jim Blake

Companies are starting to look at it more due to the pinching affect. Lock in a price then differentials rise like last year and your profit can go negative in a hurry.

GotYa!!

I sure think changing the rules midstream was a very bad move. I think it is also another nail in the coffin for new or even existing Companies to make large capital investments until there is some sign of Govt. and Regulatory stability.

[AndrewM]

Changing the rules is never good for investment. Shows they don’t think about consequences before they make the changes. I found it amazing how differentials tightened up over night yet nothing had physically changed!

[Jim Blake]

This mess is going to take a very very long time to clean up. JMHO YEARS!

[The Elkster]

Regardless of what the companies are profiting there was always going to be job losses based on the fact the there is little justification for large capital projects that bring on even more oil. Less capital projects = less people. Just because a company is making profits (based on a manipulated oil output and the resulting market price) doesn't mean they are going to pay big dollars to keep unneeded workers whether they can afford it or not.

Whilst we are roasting gov't might I remind people that the Oil companies themselves are partially to blame for this situation. Years of rampant expansion always leads to lean years. From what I saw little effort was being made to ensure these projects actually had a home for their oil. Dohhh!

Next up...real estate. Gonna be more and more builders and trades eating rice in the next few years. There is always a price to pay for boom times. Longer the boom the longer the bust. Its not different this time...it never is. Batten down the hatches.

[Jim Blake]

Originally Posted by AndrewM

Changing the rules is never good for investment. Shows they don’t think about consequences before they make the changes. I found it amazing how differentials tightened up over night yet nothing had physically changed!

Agreed! Surprising to me (although still not a great price) the natural gas differential is also tightening a bit.

[Jim Blake]

Originally Posted by The Elkster

Regardless of what the companies are profiting there was always going to be job losses based on the fact the there is little justification for large capital projects that bring on even more oil. Less capital projects = less people. Just because a company is making profits (based on a manipulated oil output and the resulting market price) doesn't mean they are going to pay big dollars to keep unneeded workers whether they can afford it or not.

Whilst we are roasting gov't might I remind people that the Oil companies themselves are partially to blame for this situation. Years of rampant expansion always leads to lean years. From what I saw little effort was being made to ensure these projects actually had a home for their oil. Dohhh!

Next up...real estate. Gonna be more and more builders and trades eating rice in the next few years. There is always a price to pay for boom times. Longer the boom the longer the bust. Its not different this time...it never is. Batten down the hatches.

Yes, planning on both the Govt. and Industry sides was just not happening.

All the Real Estate Guru's I know are predicting a 20% drop from where it is now by this time next year.

Batten down the hatches alright...and weld them up!

[AndrewM]

Originally Posted by Jim Blake

Yes, planning on both the Govt. and Industry sides was just not happening.

All the Real Estate Guru's I know are predicting a 20% drop from where it is now by this time next year.

Batten down the hatches alright...and weld them up!

In the companies defense. I don't think there are any oil companies that own a sales pipelines. Majority of the production came from the oil sands which has very long lead times. If they knew at the time that no new pipelines would be installed they wouldn't have made the investment. Problem is they have sunk the capital and share holders are looking for return on investment.

[The Elkster]

Its not just the PL's that dictate price though. There is an overriding assumption in all this PL debate that as long as the take away capacity is there that there will always be someone willing to pay top dollar for that heavy oil. That just isn't the case. There has been plenty of oil sloshing around the globe. Southern and global refiners aren't screaming for heavy oil and haven't been for some time. Even if the PL's go through there is no guarantee those bad differentials won't return as refiners have the luxury of choice of supply. Either you sell it for X or we go elsewhere.

Based on past performance I would bet that if one or more PL's get laid and the price goes up for a short time oil companies will go gangbusters once again and sink the price with too much oil AGAIN. Its the nature of capitalism. As a bonus they'll probably use Chinese labor to get us there in the next boom similar to the last. Wise use and management of a limited resource. Max value indeed.

[Map Maker]

Why don’t the oil companies get together and make an OPEC, then they can make their own curtailment of our precious resources?
Oil sold on a fair scale, everything is public and government makes sure it’s straight but otherwise stays out of the process.

[The Elkster]

LOL these companies couldn't agree for two minutes let alone manage a production agreement over any period of time. Just look at CNRL. They were all for the production cuts a few months ago. Now even after differentials have greatly improved they are still complaining...I'm sure they are still far more profitable due to the better price...but one always has to try for more more more.

Also the integrated companies have different interests. Anyone with decent refinery space can sell their crude at fire sale prices to themselves and make their profit on refining margins (down in the US). Meanwhile AB'ers get the shaft on royalties and ultimately jobs on account of overproduced dirt cheap oil. Cause at low prices hiring and wages ain't getting any better and royalties are virtually nothing. No worries. When its all gone we'll have lots of time to figure out how we could have gotten more value when oil was still around. I think by then it'll seem quite obvious where we screwed up. Hind site is 20/20

[Bigwoodsman]

Just read that Notley is increasing production by 75000bpd for February and March

BW

[Deer Hunter]

The whole curtailment thing is a publicity stunt.

[The Elkster]

Stunt or not it worked. Take a look at the price since the announcement. Pretty much the same as when OPEC makes a proclamation. Ask anyone in the know and they'll tell you OPEC cuts generally mean nothing but the headline of "Big Cuts" generally helps prices. Tis the game we play in this biz.

[AndrewM]

Originally Posted by Deer Hunter

The whole curtailment thing is a publicity stunt.

Unfortunate part of the stunt is that Albertans are the ones losing. Royalties, taxes, reinvestments and less production. The source of the problem is still there until a pipeline is built.

[Deer Hunter]

Originally Posted by The Elkster

Stunt or not it worked. Take a look at the price since the announcement. Pretty much the same as when OPEC makes a proclamation. Ask anyone in the know and they'll tell you OPEC cuts generally mean nothing but the headline of "Big Cuts" generally helps prices. Tis the game we play in this biz.

So the crude by rail push and ending of US refineries maintenance season had nothing to do with it? BP Whiting had prolonged maintenance this year for whatever reason.

Wide diffs have always happened, and historically never lasted as there is a pile of easy money to be made capitalizing on them.

Let's not pretend that the AB government knows what they are doing.

https://www.neb-one.gc.ca/nrg/sttstc...rtsrl-eng.html

https://www.oilsandsmagazine.com/new...enance-outages

[AndrewM]

Originally Posted by Deer Hunter

So the crude by rail push and ending of US refineries maintenance season had nothing to do with it? BP Whiting had prolonged maintenance this year for whatever reason.

Wide diffs have always happened, and historically never lasted as there is a pile of easy money to be made capitalizing on them.

Let's not pretend that the AB government knows what they are doing.

https://www.neb-one.gc.ca/nrg/sttstc...rtsrl-eng.html

https://www.oilsandsmagazine.com/new...enance-outages

100% agree. Only reason for the total production to be lifted today is to avert layoffs. Layoffs aren’t good with an election in a couple months! Notley only cares about being re-elected. Don’t let anyone fool themselves!