Another devastating blow to Oil and Gas businesses and producers everywhere!
Here in Alberta, while sitting on the grand oil reservoir of Canada, we can only shake our heads in disbelief. No single expert knows exactly how much oil out there exceeds the global volumetric demand but all seem to agree that the entire world is drowning in it. The Gulf countries, particularly Saudi Arabia, in tandem with Russia have been reportedly pumping at almost maximum capacity without blinking an eye.
Canada continued to be one of the heaviest hit oil producers in the world. Alberta is a premier oil producer and considered by many to be the bread basket of the whole of Canada until 2008 (financial crisis) and 2015 (oil glut) when everything started to slide, hover and down this drain. These were after oil’s great recovery from 2001, all due to the bad combination of world's oversupply of oil, ugly political landscapes and this pandemic COVID-19.
Oil Price Table by Macrotrends
It is well accepted that Alberta, Canada has an oil run economy. In the last ten to twenty years, Canada’s oil deposits were inventoried and found to be more abundant than previously perceived.
Key facts reported by Natural Resources Canada in 2018 were : 1) Canada is the fourth largest producer and fourth largest exporter of oil in the world, 2) The remaining established reserves* in Canada was recorded at 168.5 billion barrels of crude oil, 3) 96% of Canada’s proven oil reserves are located in the oil sands, 4) 96% of Canada’s oil exports go to the U.S.
"The price on the futures contract for West Texas crude that is due to expire Tuesday fell into negative territory -- minus $37.63 a barrel. Sellers were actually paying buyers to take the stuff off their hands. The reason: with the pandemic bringing the economy to a standstill, there is so much unused oil sloshing around that American energy companies have run out of room to store it. And if there’s no place to put the oil, no one wants a crude contract that is about to come due (Ngai, Raimonde and Longley, 042020.ET News)."
COVID came and now this? This virus is also killing oil and gas future as the demand goes drastically down in all sectors due to global slowing economy brought about by lockdowns. Risk Managers suddenly realized that in this century, everything might be possible. One can't help but wonder, "What's next?!"
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About the Author:
Rufran C. Frago is the Founder of PM Solution Pro, a Calgary consulting, product, and training services firm focusing on project and business management solutions. He is passionate providing advice, mentorship, education and training through consultation, collaboration, and what he uniquely calls, student-led training.
BOOKS AUTHORED BY RUFRAN FRAGO
- Risk-based Management in the World of Threats and Opportunities: A Project Controls Perspective.ISBN 978-0-9947608-0-7.Canada
- Plan to Schedule, Schedule to Plan.ISBN 978-0-9947608-2-1.Canada
- How to Create a Good Quality P50 Risk-based Baseline Schedule.ISBN 978-0-9947608-1-4.Canada
- Schedule Quantitative Risk Analysis (Traditional Method).ISBN 978-0-9947608-3-8.Canada
- RISK, What are you? The Risk Management Poem: Children's Book for all Professionals.ISBN 978-0-9947608-4-5 (Canada)