Alberta government looking at low interest credit for struggling oil and gas companies
Jason Kenney says he's spoken with federal government about contributing funds
Alberta Premier Jason Kenney says his government is examining the possibility of providing credit to cash-strapped oil and gas companies.
"We are potentially looking at setting up a credit facility that would allow for access to credit at lower rates of interest for highly distressed companies," he said.
Kenney made the comment Thursday in Ottawa, where he was supposed to take part in the first ministers conference. The meeting, however, was cancelled due to the coronavirus pandemic.
He said he has raised the possibility of the credit scheme with federal Finance Minister Bill Morneau, but that it's too early to provide any details on what that could look like or whether it would move forward.
Price war, falling demand
Alberta's oilpatch, still finding its feet from the price crash of 2015 and ongoing pipeline capacity issues, was hit hard over the past week by dwindling demand brought on by COVID-19 and a price war between Russia and Saudi Arabia.
Billions have been wiped from bottom lines of Calgary-based companies, and Canadian oil has been trading at below $20 per barrel.
Kenney said his government is preparing to help bolster the provincial economy through stimulus.
"What we're thinking of is additional fiscal stimulus that would be in the range of one per cent of our GDP thought a number of stimulative measures," he said, adding it would focus on liquidity and cash flow for companies.
The UCP government has already announced a $100-million loan to speed up reclamation of orphan wells and put people back to work on the cleanup, and Kenney has asked the federal government to contribute its own funds to the cause.
The premier also said he wants new federal regulations, like clean fuel standards, paused for at least a year to give the oil and gas industry time to recover.
"Layering on additional regulatory costs, which could impose billions of dollars of cost on the Canadian energy sector right now, would be like going to the Ontario auto sector in 2008 and saying, 'oh, by the way, we're going to force you to pay billions more in federal regulations,'" he said.
"We cannot do it right now. This could not be more critical."