Energy Minister: Alberta reduces oil production by around 1 mb/d, praises OPEC+ agreement

Vienna, Austria, 27 May 2020--The Minister of Energy for Alberta, Canada, HE Sonya Savage, supported the OPEC+ production adjustment agreement in April to battle COVID-19 demand destruction, and added that her province has reduced oil output by about 1 mb/d due to market forces.

Savage stated that corporate quarterly results “are starting to come out, so there’s a little more transparency, and now they are publicly announcing how much has come off. Our pipelines are running fairly empty, which is the reverse problem to what we’ve had for the last five years. And storage is filling as fast as you would expect.”

The Minister stated there is currently no point in announcing additional output adjustments, as production has come down on its own. Additionally, the province already had mandated adjustments in place prior to COVID-19 due to a lack of pipeline capacity and inability to move the oil out of the producing region. Savage added that the 1 mb/d in adjusted output represents about 25 per cent of Alberta’s production and is in addition to what was being pro-rationed.

In terms of the international conversation on energy security and oil production that has been sparked since the onset of the COVID-19 pandemic, Savage said that it is both essential and a good development.

“I think the collaboration and communication is excellent, and [OPEC] Secretary General [Mohammad Sanusi] Barkindo is leading all of that. He’s reached out to us, and his leadership has been tremendous.

“If the world isn’t talking, if we are not finding a solution, then there are going to be economies completely destroyed. For us in Alberta, it’s the massive job loss, people’s lives shattered as they lose jobs. We have so much of our economy dependent on the oil and gas sector, and right around the world, there are people dependent.”

Savage said these are unprecedented times, and in unprecedented times, uncommon solutions have to be found.

“I think the discussions at the OPEC+ forum involve the oil producers, the jurisdictions that have the constitutional authority over oil and gas production, so it’s a different conversation.”

She added she hopes that this conversation will continue into the future and that Alberta will remain a part of it.

There is much to discuss among oil producers, she said, including moving forward on environmental, social and governance (ESG) issues and charting a future for oil in a world that is seeking to reduce emissions.

“I think the venues that are discussing [these topics] are really helpful.”

She made her remarks in an exclusive interview to be published in the April/May issue of the OPEC Bulletin.

HE Sonya Savage, Minister of Energy for Alberta, Canada

HE Sonya Savage, Minister of Energy for Alberta, Canada