It has been two weeks since Finance Minister Bill Morneau told the Canadian energy sector that targeted aid comes “in hours, if not days.”
Classify and classify oil and gas workers, C-suite executives and dozens of Canadians employed by companies dependent on a functioning energy industry eager to hear Ottawa’s plan to help mitigate record oil prices and the overwhelming grip of COVID-19 on demand. Patience wears out.
Tuesday, at the annual conference of the Canadian Association of Petroleum Producers (CAPP), herself victim of the pandemic having been reduced to a webcast, Alberta Minister of Energy Sonya Savage, described the energy companies in a “very, very disastrous state”. She criticized Ottawa for taking “too long” to respond to concerns from the sector. Open letters recently signed by Canada’s largest oil companies and smaller drilling and service companies share his urgency.
A spokesperson for the Morneau office confirmed on Tuesday that no timetable was in place and said that work was underway with the provinces and stakeholders to provide credit measures to the industry and support for workers. . Savage said the federal aid program could also include measures to speed up the cleanup of abandoned wells.
will cost more than $ 250 billion. Rachel Ziemba, founder of Ziemba Insights, said the government has clearly put in place accelerated policies that apply to the widest possible working population and the economy. “Data-reactid =” 27 “> The Department of Finance estimates Ottawa’s current package to protect the economy from the impact of COVID-19 will cost more than $ 250 billion. Rachel Ziemba, founder of Ziemba Insights, said the government has clearly put in place accelerated policies that apply to the widest swath of workers and the economy.
“I think we will see targeted support, but the federal government very much prefers ways to support a range of related industries. I think that means that those in the petroleum sector will not deem it sufficient, “she said.
Ziemba wonders if Ottawa can impose requirements on liquidity funding, such as maintaining a certain level of staff.
“The federal government also has a broader dilemma it had from day one, how much it cares about the green agenda and renewable energy, as well as the oil and gas sector. Both of these are important to Canada, “she said. “It continues to complicate the answer. “
Canada is in talks with OPEC on cooperation to address the dire state of world oil markets. Savage said she would convene a “OPEC-plus-plus” meeting on Thursday that could include a discussion on expanding production quotas beyond OPEC and Russia to include the United States, the most the world’s largest producer, and Canada. “Data-reactid =” 31 “> Prime Minister Justin Trudeau announced Friday that Canada is in talks with OPEC on Cooperation to cope with the dire state of world oil markets. Savage said she would convene an “OPEC-plus-plus” meeting on Thursday that could include a discussion on expanding production quotas beyond OPEC and Russia to include the United States, the most major world producer and Canada.
Ziemba said Canada must prepare its own supports for the energy sector, even if it plans to enter into a new type of production quota agreement with international partners.
“Despite the fact that we could see global action, no matter what is done, it is going to be a very difficult year for much of the fossil fuel industry,” she said.
Greg Taylor, chief investment officer at Purpose Investments, manages the Toronto company’s Global Resource Fund. He welcomes the recent investment and loan guarantee from the Government of Alberta for the Keystone XL pipeline.
Prime Minister Jason Kenney presented this decision as a way to “save the future of the energy industry” and “get the country out of the COVID economic crash.” In a television address Tuesday, he warned that negative Alberta oil prices, a provincial deficit of $ 20 billion this year and an unemployment rate of 25% were on the table for his province.
“The most important thing would be to increase the capacity of the pipeline. What the Alberta government did in supporting Keystone XL, I think it was a huge step. It would be nice to see the federal government intervene or find a way to support this, “said Taylor. “It is probably unlikely. “
Taylor awaits the results of Canada’s participation in the upcoming OPEC + negotiations. He said a North American-wide energy policy to oversee supply could be a positive outcome on the horizon. For now, he is critical of the timing of the energy support promised by the Trudeau Liberals.
“I think it’s embarrassing. At the end of the day, it really shows that the federal government is doing nothing to help the West and the energy sector, “he said. “It is not really a good thing in times of crisis. You want to over react versus under react. ”
CAPP President and CEO Tim McMillan estimates that Canadian energy companies have cut their planned capital spending by $ 6 billion to $ 8 billion in the past three weeks.
“It is a time when the energy sector is particularly damaged by the actions of others as well as by the pandemic itself,” he said, referring to the Saudi-Russian price war which intensified the downward pressure of COVID-19 on petroleum.
McMillan hopes Ottawa will eventually respond with a series of measures to improve short-term liquidity, protect jobs, and keep natural gas and fuel oil flowing for customers.
“We will continue to dialogue with federal ministers and the government to try to make sure it is effective and timely,” he said. “There is frustration with the timing right now. “
@jefflagerquist.“Data-reactid =” 48 “>Jeff Lagerquist is a senior reporter for Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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