Alberta government eases oil production curtailments for September

CALGARY, ALBERTA: The government of Canada's main crude-producing province Alberta eased oil production curtailments for September on Friday, setting the new limit at 3.76 million barrels per day (bpd).

That is a 25,000 bpd increase on the August production limit. Alberta introduced curtailments effective Jan. 1 2019 to ease congestion on export pipelines that left crude stranded in storage tanks and pushed the discount on Canadian crude versus US barrels to record levels.

"Alberta is increasing September's oil production limit to reflect increased movement of crude by rail, declining inventory and improved efficiencies in export pipelines," the government said in a statement.

Canada exported 285,000 bpd of crude by rail in May, according to the latest data from the National Energy Board regulator, up 23% from April. However, there are ongoing delays to new export pipeline projects, including Enbridge Inc's Line 3 replacement.

Curtailment threw a lifeline to many oil producers who were struggling with low prices but was criticised by integrated oil companies like Suncor Energy and Imperial Oil.

Under current legislation the production limits are set to expire at the end of 2019 but Alberta Premier Jason Kenney has warned they may have to be extended into next year.