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Alberta Oil Production Sinks To Seven-Month Low

Crude oil production in Alberta fell to a seven-year low in June because of maintenance at oil sands projects and the exclusion of output from Suncor’s fields in the data.

The total stood at 2.71 million barrels daily in June, the Alberta Energy Regulator said, with Bloomberg noting this was a 21% decline on an annual basis and the lower production rate since June 2016.

The exclusion of Suncor’s production data was a surprise decision and no explanation for it was provided. The company is one of the biggest oil sands operators in Canada. Last month, Suncor said its average daily output for June had jumped by 34.4% from May to 293,000 barrels.

Oil sands mines production in Canada’s oil province dropped by 48% to 712,000 barrels daily in June. Overall oil sands production declined more modestly, by 25% to 2.15 million barrels daily.

Earlier this year, wildfires in Alberta curtailed oil production temporarily, shutting in more than 140,000 barrels of oil in daily production.

Despite the temporary production shut-in, the province’s oil industry appears to be doing well and Alberta could see a budget surplus of some $1.8 billion for its current fiscal year thanks to higher prices. And that was before prices started rising in July.

The budget assumes a slightly higher oil price, which could boost revenues even further as the oil industry remains essential for the province’s income, despite increasing pressure from environmental activist groups and the federal Canadian government.

In fact, the Canadian oil industry has become notorious for that pressure, although companies continue to produce oil and gas and support provincial and federal budgets. The latest blow to Canada’s oil came from the Trudeau government’s Just Transition bill that eyes, among other things, the re-employment of oil industry workers elsewhere as the country moves away from fossil fuels.

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By Charles Kennedy for Oilprice.com

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