Page 8 - NorthAmOil Week 43 2020

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once output restrictions imposed by the OPEC+ gas deal in nearly four years based on enterprise
group have been lifted. value, and it comes as consolidation picks up
Lukoil Mid-East’s managing director Egor in both the US and Canada. More stock-based
Zubarev said that the company had intended to deals with low premiums are expected.
increase output at the supergiant West Qurna-2 For Cenovus, the third-largest Canadian
field by 80,000 bpd, but it has actually cut pro- producer by output, the merger will narrow
duction by 120,000 bpd in accordance with a the gap with top producers Canadian Natural
request form the Iraqi oil ministry. Resources Ltd (CNRL) and Suncor Energy. Sep-
In Iran, a group of Indian developers have arately, the provincial government of Alberta Alberta’s
finally lost out on the Farzad-B gas field, has announced that it will end mandatory pro-
which has now been awarded to local firm duction curbs at the start of December, a month production
PetroPars, a subsidiary of the National Iranian earlier than previously scheduled. continues to
Oil Co. (NIOC). Tehran had previously issued This comes as Alberta’s production continues
numerous ultimatums to the group to make to be reduced as a result of companies reining in be reduced
progress. output in response to the coronavirus (COVID-
The US, meanwhile, announced a new raft 19) pandemic. Alberta Minister of Energy Sonya as a result of
of sanctions on Iran, its Oil Ministry, NIOC and Savage said nearly 16% of the province’s crude
others in a move appearing to be more about the output was currently offline. companies
look than the substance as President Donald This, in turn, has eased congestion on pipe- reining in output
Trump prepares for the upcoming election. lines carrying oil out of Alberta – which is what
the province’s government had been seeking to in response to
If you’d like to read more about the key events achieve through the mandatory curtailments
shaping the Middle East’s oil and gas sector then prior to the pandemic. COVID.
please click here for NewsBase’s MEOG Monitor . The government had already been gradually
easing the curtailments since taking office last
Consolidation in Canada as Alberta pre- year, and the latest industry downturn, exacer-
pares to end cuts bated by COVID-19, has allowed it to speed up
It has been an eventful few days for Canada’s oil the process.
and gas industry. A new merger involving two The current shut-ins mark an improve-
major Canadian producers was announced ment from 22% of the province’s oil output – or
this week. Cenovus Energy has struck a deal to 880,000 barrels per day (bpd) – being shut in at
acquire Husky Energy for CAD3.8bn (2.9bn), or the peak of the production cuts during the worst
CAD10.2bn ($7.7bn) including the assumption of this year’s downturn. Nonetheless, it appears
of debt. (See: Consolidation continues with Cana- that mandatory curtailments are no longer
dian mega-merger, page 9) needed as producers keep some demand shut
This makes it the largest Canadian oil and in voluntarily.™

P8 www. NEWSBASE .com Week 43 29•October•2020