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And a lot of the oil processed by these expansions will come from Saskatchewan and Alberta!
Trump cheers Exxon plan to spend $20B on Gulf Coast projects
DAVID KOENIG, THE ASSOCIATED PRESS 03.06.2017
Darren Woods, Exxon Mobil CEO, speaks during CERAWeek at the Hilton Americas,Monday, March 6, 2017, in Houston. (Melissa Phillip/Houston Chronicle via AP)
HOUSTON – President Donald Trump and Exxon Mobil Corp. exchanged praise for each other on Monday as the company announced plans to create thousands of jobs by spending $20 billion over 10 years on plants along the Gulf Coast.
Exxon’s plan started long before Trump entered the White House, however. It includes investments that began in 2013.
Exxon said Monday the work would create 12,000 permanent jobs — the energy giant currently has about 71,000 employees — and 35,000 construction jobs.
Exxon announced its plan in a news release in which CEO Darren Woods was quoted as saying that such big investments “require a pro-growth approach and a stable regulatory environment and we appreciate the President’s commitment to both.”
A few minutes later, the White House issued its own release about Trump congratulating Exxon. One paragraph in the White House release is nearly identical to a passage in Exxon’s.
The president followed up on Twitter, saying that “Buy American & hire American are the principals at the core of my agenda,” although he apparently meant that those are among his principles.
In his third tweet on Exxon, Trump wrote, “45,000 construction & manufacturing jobs in the U.S. Gulf Coast region. $20 billion investment. We are already winning again, America!”
In December, Trump plucked Exxon’s then-CEO, Rex Tillerson, to be his secretary of state. Tillerson and Trump met Monday shortly before the Exxon and White House press releases.
Woods, the new chairman and CEO, said Monday that Exxon would expand at several current plants and build a new one to create petroleum products for export.
Woods said the investment plan responds to the rising supply of natural gas. There has been a boom in production created by techniques such as fracking, or hydraulic fracturing, in shale formations like the Permian Basin of Texas and New Mexico.
Exxon recently agreed to buy rights to about 250,000 more acres, doubling its presence in the Permian at a cost of up to $6.6 billion — a huge bet on the hottest oil and gas field in the country.
Woods said hydraulic fracturing has “opened up a whole new energy future for the United States … (that) is turning the U.S. from energy importer to energy exporter.”
Exxon announced the spending plan at a major energy-industry conference in Houston that draws executives and oil ministers from around the world.
The company said it plans 10 expansion projects at refineries and chemical and liquefied natural gas plants around Beaumont and Baytown, Texas, and Baton Rouge, Louisiana. It also wants to build a new chemicals plant at a location yet to be determined along the Gulf.
The sum of $20 billion would be roughly equal to Exxon’s total capital spending last year. The company announced last week that it plans to increase overall investments to an average of $25 billion a year from 2018 to 2020.
Shares of the Irving, Texas-based company rose 37 cents to close at $82.83. They have lost about 8 per cent so far this year.
Fri Mar 3, 2017 | 3:25pm EST
Keystone XL can be made from non-U.S. steel: White House
A depot used to store pipes for Transcanada Corp’s planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota, January 25, 2017.REUTERS/Terray Sylvester
The Keystone XL oil pipeline does not need to be made from U.S. steel, despite an executive order by President Donald Trump days after he took office requiring domestic steel in new pipelines, the White House said on Friday.
“It’s specific to new pipelines or those that are being repaired,” White House spokeswoman Sarah Sanders told reporters on Air Force One, when asked about a report by Politico that Keystone would not need to use U.S. steel, despite Trump’s executive order issued on Jan. 24.
“Since this one is already currently under construction, the steel is already literally sitting there, it’s hard to go back. Everything moving forward would fall under that executive order,” Sanders said. The southern leg of the Keystone project is completed and started pumping oil in 2013. Some pipe segments that could be used for Keystone XL, which would bring oil from Alberta, Canada to Nebraska, have already been built.
Former Democratic president Barack Obama rejected TranCanada Corp’s (TRP.TO
) multi-billion dollar Keystone XL pipeline, saying it would not benefit U.S. drivers and would contribute emissions linked to global warming.
Trump’s order expedited the path forward for TransCanada to reapply to build the line. Economists told Reuters days after Trump issued the order on U.S. steel requirements that it had many loopholes, would not be easily enforceable, and could violate international trade law.
Even if there were no loopholes, U.S. steelmakers would receive negligible benefit from Keystone XL, because they have limited ability to meet the stringent materials requirements for the project.
The office of Canadian Prime Minister Justin Trudeau on Friday said it welcomes the allowance of non-U.S. steel, calling it a “recognition that the integrated Canadian and U.S. steel industries are mutually beneficial.”
TransCanada said it was encouraged by the White House statement on non-U.S. steel and that its presidential permit application on Keystone was making its way through the approval process.
Canadian Public Safety Minister Ralph Goodale said on Twitter that allowing non-U.S. steel was “important for companies like Evraz Steel,” a local subsidiary of Russia’s Evraz PLC, which had signed on to provide 24 percent of the steel before Keystone XL’s rejection by Obama.
(Reporting by Melissa Fares on Air Force One, Ethan Lou in Calgary and Timothy Gardner in Washington; Editing by Chizu Nomiyama)
Charts: Canadian oil exports reached record highs at the end of 2016
By Deborah Jaremko
March 2, 2017, 2:37 p.m.
Growing oilsands production from both mining and in situ projects contributed to Canadian crude oil exports reaching an all-time high in November 2016, the National Energy Board (NEB) says.
This surpassed the previous high set almost a year before, with volumes being curtailed in the intervening months in part because of the Fort McMurray wildfire disruption in spring of last year.
The November figure is also a 300,000 bbl/d increase from October 2016, the NEB says.
“Most of the increase was shipped on pipelines to the United States (U.S.) Midwest Region (PADD II), but marine exports to the U.S. East Coast (PADD I) and railed exports to the U.S. Gulf Coast (PADD III) also had notable increases,” the NEB says.
“Pipeline exports reached an all-time high of 2.99 million bbls/d, marine exports reached a 28-month high of 272,000 bbls/d, and railed exports reached a then 14-month high of 120,000 bbls/d.”
Encanto Potash and Muskowekwan First Nation sign new mining regulation agreement
ALEX MACPHERSON, SASKATOON STARPHOENIX
Published on: February 28, 2017 | Last Updated: February 28, 2017 5:04 PM CST
Muskowekwan First Nation Chief Reginald Bellerose, left, and Encanto Potash Corp. President and CEO Stavros Daskos.
BRYAN SCHLOSSER / REGINA LEADER-POST
Encanto Potash Corp. has signed an agreement with Muskowekwan First Nation and the provincial and federal governments that it says will pave the way for construction of its proposed potash mine on the reserve northeast of Regina.
The agreement is expected to lead to the first First Nations Commercial and Industrial Development Act (FNCIDA), legislation that applies existing provincial rules to large-scale projects on First Nations land, the Toronto-based company said in a news release.
“By achieving this milestone, the first ever for such a planned large scale operation in Canada, we have been breaking entirely new ground,” Muskowekwan Chief Reginald Bellerose said in a statement.
“(We are not only ensuring) that we ourselves are a significant resource player in Canada for generations to come, but paving the way for other First Nations to achieve self-source revenues and a self-dictated future full of promise.”
Encanto has been exploring the possibility of a potash mine in southern Saskatchewan for years. It signed a joint venture agreement with the First Nation in 2010; in January, it announced two new 20-year sales agreements with India-based firms.
Gary Deathe, Encanto’s director of corporate development, said in an email that the FNCIDA agreement is a “long awaited and important step” toward establishing the mine.
Encanto still needs to raise around $3 billion to cover its capital costs.
Because projects regulated under FNCIDA apply existing provincial regulations to First Nations land, “it gives investors and developers certainty by ensuring that they are dealing (with) … well known and understood (rules),” Encanto said in the news release.
“This represents another critical piece being in place to allow for the eventual development of the first potash mine on First Nation land in Canada and the first … to complete the FNCIDA,” Encanto president and CEO Stavros Daskos said in a statement.
Concerned Shore Gold shareholders renew quest to shake up diamond company’s board
ALEX MACPHERSON, SASKATOON STARPHOENIX
Published on: March 1, 2017 | Last Updated: March 1, 2017 6:00 AM CST
An aerial view of Shore Gold Inc.’s Star-Orion South Project east of Prince Albert. SASKATOON
A group of concerned Shore Gold Inc. shareholders are raising money to fund a legal battle after the Saskatoon-based diamond exploration and development company rejected their latest attempt to shake up its board of directors.
The Shore Gold Shareholders Association Inc. (SGFSA) plans to challenge the company’s refusal to publish and allow shareholders to vote on a proposal that two directors of its choosing be appointed to the board, according to the association’s chairman.
“We need to go to court and have a judge do two things,” David Wright said. “One, interpret the wording and intent of the law, and two, make a judgment whether or not … Shore must in fact publish our shareholder proposal.”
Shore Gold staked its first claim in the Fort à la Corne forest in 1995. It wants to build a diamond mine consisting of two large open pits and a processing plant on the property, known as Star-Orion-South, about 60 kilometres east of Prince Albert.
The SGFSA was formed in 2012 and consists of “progressive” investors representing “well above 10 per cent” of the company’s 294 million shares, who are concerned about its direction and efforts to communicate with its shareholders, according to Wright.
Members of the group came close to blocking the appointment of three Shore Gold directors at a tense meeting last June. Wright said the proxy vote was a shot “aimed at the wheelhouse.” Shore Gold’s chairman deemed it illegal but allowed the results to stand.
“We felt it appropriate that we have some direct say on their board of directors,” Wright said of the SGFSA’s proposals, which were filed this year and subsequently rejected based on differing interpretations of the Canada Business Corporations Act (CBCA).
Shore Gold President and CEO Kenneth MacNeill said Tuesday that the board is “always” looking at representation, and that while he and shareholders wish the company could be more transparent, public firms are bound by laws governing communications.
“I don’t see this as a hard stance,” MacNeill said of the company’s position. “I see this as we are following the (CBCA) rules and regulations that we need to follow … We’ve certainly responded very robustly to this and explained this to them.”
Meanwhile, Shore Gold is updating its “conservative” 2011 feasibility study. MacNeill did not provide a timeline but said it will “significantly” reduce capital costs and make the mine more attractive to potential financiers, joint venture partners and purchasers.
Shore Gold vice president of exploration and development George Read said the updated study will include better geological information, cheaper and more effective processing technologies and more efficient methods for opening the massive pits.
The company is also waiting for the province to finish consultations and issue environmental approval for the project. The province declined in January to say when a decision would be rendered. Shore Gold received approval from the federal government in 2014.
As that work continues, the SGFSA will canvass its members for the money it needs to pursue its case. Wright said the association simply wants to get its proposal in front of every Shore Gold shareholder and allow them to vote on it.
“I’m very hopeful that we will be able to raise the funding to mount that challenge, and I’m also very confident that we will win that challenge when in fact we do mount it,” he said.
Highest Average Weekly Earnings in Province’s History
Released on February 23, 2017
According to Statistics Canada numbers released today, Saskatchewan workers enjoyed the highest month-over-month percentage growth in average weekly earnings among the provinces in December 2016, up 2.2 per cent (seasonally adjusted) from the previous month to $1,010.37.
The national month-over-month increase was 1.0 per cent (seasonally adjusted).
For the first time in the province’s history, the average weekly earnings were above $1,000—and remain the third highest among the provinces.
“Saskatchewan people are taking home more money at the end of the week, and this is a reflection on our economy and the opportunities in our province,” Economy Minister Jeremy Harrison said. “The increased earnings show our wages are very competitive, and this remains an attraction for skilled workers to our province.”
With inflation factored in, Saskatchewan’s real wage increased by 1.2 per cent year-over-year while the national real wage declined by 0.3 per cent.
The province’s real wage ranked third highest among provinces in Canada.
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Canada losing ground as mining investment destination
Feb 16, 2017
Source: MAC’s Facts & Figures 2016.
While optimism is slowly but steadily returning to the global mining industry, Canada doesn’t seem to be in a good position to benefit from the increasing number of companies ready to make new and significant investments.
At least that is the conclusion from a report released Thursday by the Mining Association of Canada (MAC), which also warns of the possibility of seeing major exploration and mining investments flow offshore.
“Very simply, Canada is not as attractive as it used to be for mineral investment, and competition for those dollars is growing globally,” MAC President and CEO Pierre Gratton said.
Elimination of federal mining tax incentives, regulatory delays, uncertainty and major infrastructure deficits in northern Canada are all contributing to the country’s declining appeal.
The recent elimination of federal mining tax incentives, regulatory delays and uncertainty, combined with major infrastructure deficits in northern Canada are all contributing factors that can explain Canada’s declining attractiveness, Gratton noted.
The report also highlights the policy areas that Canada needs to pay attention to in order to seize future growth opportunities and re-gain its leadership in mining.
Some of the figures included in the report are quite telling. In 2015, foreign direct investment into Canada’s mining industry dropped by more than 50% from the previous year. In contrast, the country’s resources sector direct investment abroad only experienced a 6% decline.
According the industry body, such imbalance proves that Canada no longer attracts the single-largest share of total global mineral exploration spending, a top place it lost to Australia in 2015. Further, MAC says, no new mining projects entered the federal environmental assessment stage in 2016.
If these trends continue, the association warns, there will be fewer discoveries made and fewer projects to become operational mines in Canada.
Despite the challenges, the sector remains a key contributor to the Canadian economy, employing more than 370,000 people across the country and being the largest private sector employer of Aboriginal people on a proportional basis.
In 2015, the mining industry accounted for $56 billion of Canada’s GDP and minerals and metals accounted for 19% of Canadian goods exports.
Wary shippers back Keystone XL but favour alternatives on Trump ‘tweak’ fears
Geoffrey Morgan | February 15, 2017 3:51 PM ET
CALGARY – Canadian oil companies are recommitting to TransCanada Corp.’s Keystone XL pipeline, though some producers are concerned about threats of “tweaks” to the North American Free Trade Agreement and a border adjustment tax by the U.S. government.
TransCanada has been canvassing support for its long-delayed but recently revived pipeline between Alberta and the U.S. Gulf Coast at a time when many domestic oil producers are concerned U.S. President Donald Trump could impose new trade taxes on exports to the States.
Trump did soothe Canadian nerves by stating he is only looking for ‘tweaks’ to the Canadian portion of the NAFTA agreement, but it’s unclear whether the minor changes could turn into major implications for Canadian businesses.
In the meantime, other pipeline proposals such as the Alberta-to-New-Brunswick Energy East pipeline and Kinder Morgan Canada’s Trans Mountain expansion project, are looking increasingly attractive as they connect Alberta to new overseas markets and also serve as a hedge against the oilpatch’s utter dependence on the U.S. and its political risk.
Trent Stangl, Crescent Point Energy Corp. senior vice-president, investor relations and communications, said forecasts show Asian and Indian markets to be key growth drivers for oil products over the next 20 years, and the company “is excited to have multiple opportunities to get to different markets.”
He said export pipelines to the East and West Coasts “gives us more diversity and helps protect us against regulatory and fiscal issues.”
Some producers have reaffirmed their support for Keystone XL project, which was rejected by former president Barack Obama but recently revived by Trump and now needs shippers to re-sign transportation agreements.
“We are, and we remain, a committed shipper on both pipelines,” Suncor Energy Inc. spokesperson Sneh Seetal said of Keystone XL and Energy East pipeline, adding that Suncor’s chief executive Steve Williams downplayed concerns over a border adjustment tax last week.
Privately, however, other energy executives have expressed concerns to the Financial Post about a border adjustment tax and about committing to more U.S.-bound oil shipments on Keystone XL given the uncertainty.
“The last several years, starting with the inability to get Keystone XL across the finish line, and now with border taxes and things like that, it really highlights the need to have a diverse market,” one Alberta executive said, asking not to be named.
Neither producer, nor transporter, nor consumer likes uncertainty, ARC Energy Research Institute executive director Peter Tertzakian said. “The propensity to commit to long-term, big-ticket projects goes down dramatically anytime there’s regulatory or policy uncertainty.”
Trump’s invitation to TransCanada to re-apply for a presidential permit for the pipeline comes at a difficult time for the company, given the president has sought “tweaks” to NAFTA without offering much details.
When asked whether a possible border adjustment tax has made it difficult to secure commitments on the U.S.-bound pipeline, TransCanada spokesperson Terry Cunha would only say, “discussions with our customers on Keystone XL continue.”
Martin Pelletier, TriVest Wealth Management co-founder and industry analyst says shippers are right to be wary. “Why would anybody sign on anything right now, provide any kind of commitment, before we get clarification? That’s like putting the cart before the horse.””
”Why would anybody sign on anything right now”
Similarly, Calgary-based Canadian Energy Research Institute vice-president, research Dinara Millington said an import tax could change the economics of sending oil barrels to the U.S. “The shippers will need to evaluate what their project economics are and whether it makes any sense to them in terms of their netback.”
Millington recently published a study that showed domestic oil companies will need both Energy East and the Trans Mountain expansion pipeline, given oil production forecasts over the next 20 years. At the time of the study, Keystone XL had been shelved, she said, but added that shippers could eventually fill all three pipelines.
“There will still likely be considerable support for the Keystone XL option,” Gary Leach, the Calgary-based president of Explorers and Producers Association of Canada said in an interview. The project would likely be prioritized within TransCanada’s portfolio of projects because the company has already completed the southern leg of the pipeline, he said.
“More options are always better, but somebody’s got to pay for it and the pipeline company needs some assurance they’ve got volume commitments,” Leach said.
Highest Manufacturing Sales Growth in Canada
Released on February 15, 2017
Manufacturing sales in Saskatchewan rose 5.4 per cent (seasonally adjusted) between November 2016 and December 2016, the highest percentage increase among the provinces. Nationally, sales were up 2.3 per cent.
“This marks the second straight month of increases in manufacturing sales,” Economy Minister Jeremy Harrison said. “It is one of the most diverse sectors of the economy that exports products to clients all over the world.”
On a year-over-year basis, sales were up 11.9 per cent (seasonally adjusted) in Saskatchewan, the second highest among the provinces and well ahead of the 4.1 per cent posted nationally.
In December, manufacturing sales totalled $1.3 billion. Major gains on an annual basis were recorded year-over-year for machinery manufacturing (up 4.5 per cent), wood products (up 21.6 per cent), and food manufacturing (up 26.0 per cent) on a seasonally unadjusted basis.
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Oil firms resume rail shipments as crude oil pipelines fill up again
Jesse Snyder | February 13, 2017 4:08 PM ET
CALGARY — A looming pipeline shortage could force more barrels of Canadian oil onto rail cars over the next few years, as oilsands companies look for alternative shipping options amid a gradual rise in production.
The oil industry’s pipeline woes have eased in recent months after Prime Minister Justin Trudeau approved two major pipeline proposals, and after U.S. President Donald Trump invited TransCanada Corp. to resubmit the Keystone XL pipeline permit.
However, the earliest date of completion for any new pipeline project is around the end of 2019 — if there are no delays. With oilsands production expected to rise over the next five years, and with Canada’s pipeline system near capacity, oil firms are tapping crude-by rail once again.
“The reality is, without additional physical steel being put in the ground there will come a point where that pipeline system will be overtaken,” said Kevin Birn, an analyst with IHS Cera in Calgary.
Volumes of crude moving by rail are already on the rise. Canadian crude oil exports by rail surpassed 120,000 bpd in November 2016, the highest in 13 months.
Recent volumes are nearing their peak of 172,000 bpd in March 2014, when several deadly accidents involving crude-laden trains turned oil-by-rail transportation into a contentious topic, according to the National Energy Board.
The prominence of oil-by-rail transportation came as oil prices were riding high, causing pipelines to reach their capacity. Producers began expanding their rail capabilities at great expense, but oil production tapered off after oil prices crashed in late-2014. Pipeline operators also began finding ways to more efficiently move liquids through their systems, which further dampened demand for rail shipments.
Today, rising oilsands output is setting the scene for a modest oil-by-rail resurgence.
GMP FirstEnergy analyst Martin King wrote in a recent research note that higher oilsands production was raising the “potential for (rail) activity to return to previous highs set in 2014.”
That is partly because analysts expect that much of the efficiencies wrung out of the Canadian pipeline system in recent years have reached their maximum.
Midstream companies like TransCanada and Enbridge Inc. have begun moving higher volumes of liquids by replacing older pumps along their pipelines; blending various types of crude together to better utilize space; or adding chemicals and lubricants that allow for better flow.
“Midstream companies’ ability to optimize that system has been very good in recent years, but it’s going to get increasingly tight,” Birn said.
The looming pipeline crunch caused several oilsands companies to buy into rail capacity as a way to diversify their customer base.
Oilsands operator Cenovus Energy Inc. moved an average 15,000 barrels per day by rail in the third quarter of 2016, up from 6,600 barrels in the third quarter of 2015.
“It does allow us to move barrels to refiners that otherwise wouldn’t be able to receive them,” said Cenovus spokesperson Reg Curren.
The company owns roughly 100,000 bpd in rail capacity, including the roughly 70,000 bpd rail terminal in Bruderheim, Alta., that it purchased from Canexus Corp. in 2015.
Imperial Oil Ltd., another oilsands operator, and its joint-venture partner Kinder Morgan, own roughly 210,000 barrels per day of rail capacity out of a terminal based in Edmonton, Alta. The companies did not divulge recent shipping volumes.
With oilsands production set to rise between 600,000 bpd and 800,000 bpd in the next five years, according to some estimates, producers have begun to show more interest in rail options.
Canadian oil production averaged 3.7 million bpd in 2015, according to the Canadian Association of Petroleum Producers. But that number could reach as high as 5.2 million bpd by 2021, according to projections from the International Energy Agency.
“People have been calling us, hedging their bets,” said John Zahary, the CEO of Altex Energy Ltd., an oil-by-rail logistics firm.
The company today moves around 20,000 bpd of crude through its three main rail offloading facilities. That is lower than the 30,000 bpd it moved when oil-by-rail shipments were at their peak, but Zahary says current volumes could rise as more supply comes on stream.
However most analysts don’t see foresee a similar boom in rail shipments as the rapid build out of rail terminals in 2013-2014 led to an oversupply of capacity.
That undersupply, coupled with low pipeline availability, sent costs skyrocketing for Canadian producers.
“We don’t expect to see the blowouts we’ve seen in the past because of all the infrastructure we’ve seen built out in recent years,” Birn said.
Industry estimates that, on average, rail shipments can cost between $15 and $18 per barrel, compared to $7 to $10 per barrel to ship via pipeline.