A tale of two energy sectors

U.S. views on oil boom at odds with Canada’s

Oil prices are rallying, but instead of reaping the benefits Canadian oil and gas producers are stuck on the sidelines while their American counterparts are riding them with all they’ve got.

Indeed, a tale of two oil and gas sectors is emerging. On the Canadian side, the mood is subdued, budgets for 2018 are flat relative to last year, and job creation has taken a back seat to automation.

The Canadian sector is held back by pipeline bottlenecks that are depressing both oil and gas prices (WTI rose near US$64 a barrel Thursday, while Western Canadian Select was trading just above US$37), governments that are more concerned about transitioning to renewable energy, investors who’ve moved on to better and faster opportunities elsewhere.

On the U.S. side, optimism is strong, thanks to the U.S. industry’s success in producing shale gas and tight oil and in crushing barriers to export the new production globally, plus support from a president whose only concern about fossil fuels is that there should be more.

Jack Gerard, president of the American Petroleum Institute (API), reflected the U.S. industry’s buoyancy in his annual state of the industry address this week.

“We have taken the nation from energy scarcity to energy abundance, from making products abroad to a rebirth of U.S. manufacturing,” he said in Washington Tuesday.

“How we measure the success of our campaign goes beyond the scope of one transaction for TMX and for Canada,” Thadaney said.

He added that through the process, the TMX Group has made “significant progress in Saudi Arabia, throughout the region, and around the world in communicating TMX’s value proposition and increasing the profile of Canada’s premier marketplace.”

The Aramco listing has been the subject of intense speculation. In recent months, reports emerged that Saudi officials were considering delaying or even cancelling the IPO or even instead offering investments in Aramco privately. Reuters had previously reported that China offered to buy five per cent of Aramco directly.

One of Reuters sources said a phased listing was being considered, with the local listing occurring first, followed by international listing or listings at a later stage.

The second source said it was possible that Aramco would be listed on all three international exchanges, as well as the Saudi bourse, but cautioned that no decision had been taken.

The first source said discussions involved listing on at least two of the three venues.

“As far as Aramco goes, late 2018 remains the objective and the plan and everything is moving to deliver that,” the first source said.