Oil companies will soon no longer have a limit on how much they can produce.
The provincial government announced on Friday they’re lifting the curtailment policy, starting in December, to allow producers to take advantage of pipeline capacity and create jobs.
Due to the COVID-19 pandemic and drop in oil prices, around 16 per cent of production is already offline.
The GoA notes in August the daily production was just over three million barrels per day, with the limit set at 3.8 million.
“Maintaining the stability and predictability of Alberta’s resource sector is vital for investor confidence as we navigate the economic conditions brought on by the pandemic, the commodity price crisis, and the need for pipelines,” said Sonya Savage, Alberta’s Energy Minister.
The policy was first brought in by the Alberta NDP and extended by the current government to deal with the lack of storage.
According to Genscape, crude inventories have dropped by around 20 million barrels from the start of this year.
“The government is keeping the policy around until at least December 2021 to allow them to put a limit on production if storage starts to run out again,” added Savage.