Canada energy firms fret as Ottawa labors over promised aid package

CWC Energy Services

01/04/2020 22:46

By David Ljunggren and Jeff Lewis
    OTTAWA/TORONTO, April 1 (Reuters) - A government aid package
for struggling Canadian energy firms has run into weeks of
delays, in part because officials are still trying to obtain
up-to-date data, according to three sources familiar with the
matter.
    The oil and gas sector in the western province of Alberta,
home to the world's third-largest crude reserves, has been hard
hit by plummeting crude prices due to low demand and excess
supply from Saudi Arabia and Russia. 
    Smaller energy firms are seen as particularly vulnerable to
the historic decline in prices. 
    Finance Minister Bill Morneau said on March 18 that Ottawa
was working with Alberta on support for energy industry workers
and promised to announce a significant investment to clean up
wells with no legal owner "in the coming days."
    There has been no tangible sign of help yet, however, as
Ottawa struggles to quantify the extent of the challenge.
    "We are not walking back anything we have committed to. It's
just more about getting it right ... it's hard to be able to
give a timeline with certainty," said one source, who requested
anonymity given the sensitivity of the situation.
    The source said the picture on the ground was very fluid as
oil prices keep dropping while inventories build up. 
    "There are a lot of complicated questions around all of
that. (There are) also overlapping jurisdictions, so we have to
work especially closely with the provinces," the source said.
    A second source said the situation in energy-producing
provinces was so fluid that officials had to continuously update
their projections.
    Apart from the energy sector, there has yet to be any sign
of the aid packages Ottawa has also promised the airline and
tourism industries.
    A third source, speaking about the energy sector aid, said a
big challenge involved wrapping up details of the wage subsidies
meant to support workers during the industry downturn. 
    "So there's a lot of people not getting a lot of sleep right
now," the source said.
    Western Canada Select heavy crude for May delivery in
Alberta traded on Wednesday at a net price below $5 per barrel,
among the lowest on record.
    Ottawa is considering ways to backstop banks to ensure they
allow oil companies to access existing and new lines of credit,
preventing massive job losses, sources said last week.
 urn:newsml:reuters.com:*:nL1N2BH0TT
    "There is no other button to push than layoffs," said Duncan
Au, chief executive at oil service company CWC Energy Services
Corp  CWC.V , which has laid off nearly a fifth of its staff and
cut salaries by 10%.

 (Additional reporting by Rod Nickel in Winnipeg and Steve
Scherer in Ottawa; Editing by Tom Brown)
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