Canada oil sector gets $1.2 bln to diversify away from US
Ottawa (AFP) –
Canada's oil sector, hurt by low prices and a lack of pipeline capacity to get its product to new overseas markets, received Can$1.6 billion (US$1.2 billion) in government aid on Tuesday.
The federal monies include direct aid and export development loans to help the sector "diversify export markets for its resources beyond the United States," according to a statement.
Natural Resources Minister Amarjeet Sohi and Trade Minister Jim Carr at an announcement in Edmonton, Alberta also said additional funding is available to "address bottlenecks in the freight rail system."
"The oil and gas industry is core to Canada's economy," Sohi said.
"These investments will help protect jobs and restore competitiveness during this difficult time," he said.
Sohi added that "getting our resources to non-US markets is the long-term solution to ensuring every barrel of oil gets its full value."
The boost comes amid a particular difficult time in Canada's oil patch.
Canada is the world's fourth largest oil producer and exporter, but almost all of it goes to the United States.
Construction of new pipelines to US Gulf coast refineries and to the Canadian Pacific tidewater for shipping overseas have been held up by environmental protests.
Prices for Western Canadian Select were below US$15 in November before bouncing back slightly after Alberta annonced it would cut production, as well as buy tanker cars to move oil by rail until new pipelines can be built.
But at US$25 on Tuesday, Alberta crude oil was still heavily discounted compared to the benchmark West Texas Intermediate at US$47.50.
Alberta lawmakers have warned that Canada is losing tens of millions of dollars per day due to the price differential.
? 2018 AFP