Official (Alberta) Oil Discussion Thread

[Yoho]

https://twitter.com/user/status/1501932584141410304

[Macman]

A new Gwynn Morgan column.

https://www.msn.com/en-ca/money/tops...edgdhp&pc=U531

Middle Eastern countries, led by Saudi Arabia, will be major contributors and, despite U.S. and U.K. bravado in banning Russian imports, current and forecast world oil demand cannot be met without Russian oil. The disparate list of countries controlling world oil supply may soon include Iran if, as news reports suggest, President Biden is naïve enough to remove oil export sanctions in return for the Ayatollah’s “pledge” to suspend uranium enrichment. That would leave world oil supply security in the hands of one country that subjugates women, another led by a murderous psychopath and a third developing a nuclear bomb with the avowed objective of annihilating Israel.

The 11 cents/litre Federal Carbon Tax doesn’t seem like much compared with current total pump prices. But it’s just the beginning. The Trudeau government plans to progressively increase the carbon tax to 38 cents/litre by 2030. Adding the nine cent/litre B.C. Carbon Tax means drivers in that province will pay carbon taxes of 47 cents/litre.

[Bill Bumface]

Originally Posted by Macman

A new Gwynn Morgan column.

Sometimes I may agree or disagree with a specific opinion of his, but in general, the man is an egotistical blowhard.

He is quick to blame anyone else for the demise of the Canadian oil industry, but completely lets himself off the hook for being a big driver of the bandwagon to remove the massive base of international diversification of the Canadian oil industry that put them in the position to be subject to the whims of a single nation's government.

[bizaro86]

Originally Posted by Bill Bumface

Sometimes I may agree or disagree with a specific opinion of his, but in general, the man is an egotistical blowhard.

He is quick to blame anyone else for the demise of the Canadian oil industry, but completely lets himself off the hook for being a big driver of the bandwagon to remove the massive base of international diversification of the Canadian oil industry that put them in the position to be subject to the whims of a single nation's government.

EnCana under his leadership sold two big international positions iirc, Ecuador (which was bought by a Chinese SOE) and the UK's North Sea (bought by Nexen). Both countries subsequently had tax/royalty changes much worse than anything we've seen in Alberta (Ecuador windfall prodits tax...) In many ways going all in on political stability in Canada compared to other places seems like a reasonable choice to me.

[Bill Bumface]

Originally Posted by bizaro86

EnCana under his leadership sold two big international positions iirc, Ecuador (which was bought by a Chinese SOE) and the UK's North Sea (bought by Nexen). Both countries subsequently had tax/royalty changes much worse than anything we've seen in Alberta (Ecuador windfall prodits tax...) In many ways going all in on political stability in Canada compared to other places seems like a reasonable choice to me.

Except when Canadian oil was selling for an absolute pittance vs. Brent.

The removal of diversification across the board for short term "pure play" shareholder value looks pretty universally bad in hindsight.

See:
- Current oil production of Devon, a former "pure play" North American gas company
- Current oil production of the former EnCana, who went through massive expense to carve off oil assets to Cenovus and midstream elsewhere
- Current gas production of Cenovus

[Yoho]

https://twitter.com/user/status/1506987962235506688

[Zarley]

I never thought I'd see the day where this government would publicly announce support for an increase in oil production.

[Johnny Makarov]

Originally Posted by Zarley

I never thought I'd see the day where this government would publicly announce support for an increase in oil production.

This government who bought a pipeline?

[stampsx2]

Originally Posted by Yoho

https://twitter.com/user/status/1506987962235506688

by UP TO 300,000 barrels per day. Russia supplies europe with 5 million barrels per day. We can’t ship more, our pipelines are at capacity. How sad.

[CaptainCrunch]

Yeah, we don't have the pipeline capacity to ship what's really needed.



And it sounds like environmental groups are going to raise hell if Canada tries to increase its facilities.

[Suave]

Its a production issue right now with oil, not a shipping issue. We have enough capacity right now to ship what we produce, plus a large buffer in rail capacity. Once Trans Mountain comes online, that gives us a even greater buffer.

Production right now is limited mainly by labor, supply issues, investing environment ( return to shareholders vs increasing production) and time (regulatory/engineering for large programs).

[Geraldsh]

How do the timelines compare? Will Russian sanctions be removed just when we are getting up to meaningful production? Will there be a decent window for Canada to lock in more market share?

[Tron_fdc]

I have no idea what the timeline is (does anyone?) as far as sanctions coming off Russia. I doubt we are looking at days or months though, it's likely years.

Even if Canada doubled its production and egress and everyone went back to their Russian supply, worldwide demand AND REFINING CAPACITY would still be there for what we produce. Factor in long term depletion rates (Natural decline rates on petroleum wells/fields is a minimum of about 3 percent/yr and shale fields I have seen estimates up to 40% compared to 1-4% for oilsands). Meaning long term, one of (the?) last producing land based oil asset on earth is likely going to be the oilsands.

It would be prudent for Canada to develop these assets and continue to use them to drive overall technological innovation and fund renewables.

[Samonadreau]

I wish we could just have $80 oil and $4 gas and stay there. It's bananas out here, and no wages have gone up.

[Cappy]

Originally Posted by Samonadreau

I wish we could just have $80 oil and $4 gas and stay there. It's bananas out here, and no wages have gone up.

Sounds like some sort of National... Energy... Program...

[Leeman4Gilmour]

Originally Posted by Samonadreau

I wish we could just have $80 oil and $4 gas and stay there. It's bananas out here, and no wages have gone up.

In O&G, it'll happen (wages going up). It does every cycle. This one will be somewhat different. Everyone hunkered down, took salary cuts, demonstrated huge loyalty to their employer etc. to stay employed during the pandemic. It definitely feels like #### is about to hit the fan and when it does, it's going to be a massive merry-go-round as people move from one company to the next negotiating their way back to boom time wages.

Hot take or prediction - that's how I see this playing out.

[Monahammer]

Originally Posted by Cappy

Sounds like some sort of National... Energy... Program...

The national energy program would be today's conservative's wet dream. National energy independence, broad multiprovincial participation in oil and petrochemical refinement, multiple transnational pipelines.

But we were greedy instead!

[accord1999]

That assumes that a NEP implemented in the early 1980s would have followed the same production capacity increases as in real-life (well over 3X since the early 80s). I would expect it to be a mediocre system that wouldn't produce much more oil then what Canada consumed and greatly limited the economic benefits to Alberta because there wouldn't be anybody, government or private willing to invest the tens-hundreds of billions of dollars needed for the oil sands to produce three, four million barrels/day.

[indes]

Originally Posted by Samonadreau

I wish we could just have $80 oil and $4 gas and stay there. It's bananas out here, and no wages have gone up.

Wages have yet to go up but the bonuses for trades were huge last year for people working on turnarounds. Some people were taking home an extra 15-25% just for retention bonus.

I've also heard of multiple companies having severe staffing issues, even enough so where they had to back out of contracted work. Hopefully this leads to higher wages and more positions in the short term. Unfortunately for clients the mass exodus of talent over the last 8 years has led to a complete degradation of quality and efficiency in work these days.

[Samonadreau]

Originally Posted by indes

Wages have yet to go up but the bonuses for trades were huge last year for people working on turnarounds. Some people were taking home an extra 15-25% just for retention bonus.

I've also heard of multiple companies having severe staffing issues, even enough so where they had to back out of contracted work. Hopefully this leads to higher wages and more positions in the short term. Unfortunately for clients the mass exodus of talent over the last 8 years has led to a complete degradation of quality and efficiency in work these days.

Not sure who's getting these bonuses. I haven't heard of anyone around here getting them.

I guess first world problems. But i would be happy if oil/gas prices came back down a bit and if anything we were punching a few less wells to keep reservoirs more sustainable longer too.

Most folks around here are still putting in 15hr worth of work in a 10 hr day just to keep up and theres no wage increases to make up for inflation.

Hopefully its coming i guess.