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Alberta’s OPEC-style cuts draw down oil backlog, analysis firm says

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Concerns with the fallout from Alberta’s OPEC-style cuts may persist, but an energy data analysis firm says the mandatory oil curtailment appears to be drawing down crude inventories.

The province this month imposed an 8.7-per-cent oil-production cut on industry, or roughly 325,000 barrels a day, in order to clear a huge backlog of crude that was punishing Alberta oil prices.

Government officials haven’t released statistical updates on the effectiveness of the strategy, but a senior oil analyst at Genscape Inc. said its research indicates the curtailment is working as intended so far.

“We are seeing it through January 19th roughly in line with what the government has stated as their goals to draw down inventories,” Mike Walls said in an interview.

“For the most part, we saw significant builds [in inventories] basically throughout 2018, and now we are starting to see draws. So I can say that they are having an impact already.”

Premier Rachel Notley has pointed to the narrowing gap between Canadian and American benchmark oil prices as evidence of the impact of the government’s strategy. (Jason Franson/Canadian Press)

On Twitter Friday, Genscape said inventories in Western Canada fell 603,000 barrels to 34 million barrels for the week ending Jan. 18, pointing to it as “further evidence that Alberta production cuts continue to impact the market.”

The privately held U.S.-based firm uses both public data and proprietary research to gather information for clients on storage hubs, pipeline flows and crude-by-rail shipments in Western Canada.

The province did not confirm Genscape’s figures. The government gets its data from a third party and the information is not publicly available.

“We’re currently reviewing how much has been drawn down from all storage levels across Alberta,” government spokesperson Mike McKinnon said in an e-mail. “More information, including the next steps, will be available soon.” 

Alberta is matching its production levels to what its estimated export capacity is while also encouraging a drawdown in storage levels. For January and February, this production limit is 3.6 million barrels a day of raw crude and bitumen, which is slightly lower than the province’s estimated export capacity.

Premier Rachel Notley has pointed to the narrowing gap between Canadian and American benchmark oil prices as evidence of the impact of the government’s strategy.

Peter Tertzakian, executive director of the ARC Energy Research Institute, said he believes the province’s policy is working. (Monty Kruger/CBC)

On Friday, the difference was under $10 US a barrel. In the fall, it spiked to over $50.

Energy economist Peter Tertzakian, executive director of the ARC Energy Research Institute, said he believes the policy is working and that the price is a good gauge. 

“The differential has rebounded,” said Tertzakian.

“I’m optimistic we’re through the worst of it and hopefully we won’t need government intervention in the future. But the extraordinary action that they took at that time was appropriate.

“We were facing catastrophic layoffs had the situation gone on for several more weeks. I believe that was averted. Now, the situation is still not healthy, but I believe the government prevented something far worse from happening.”

Alberta announced in early December that it would temporarily impose production cuts on the industry in 2019.

The decision followed calls from some oil company CEOs — and United Conservative Party Leader Jason Kenney — for the province to enact a mandatory curtailment to bolster prices, improve cash flow and stem job losses.

But opponents of the policy — including Suncor, Husky Energy and Imperial Oil — said the market was working and that taking such a step could have implications for future investment in Alberta.

Hundreds of oil tank cars are waiting to be loaded at a terminal near the border of Alberta and Saskatchewan. For January and February, Alberta’s production limit is 3.6 million barrels a day of raw crude and bitumen, which is slightly lower than the province’s estimated export capacity. (Dave Rae/CBC)

Conference Board of Canada chief economist Pedro Antunes wrote this month that intervening in industry production plans “could hurt the province’s attractiveness for future investment over the long term.” 

But he also said the near-term solution “will likely be effective in shoring up prices and heading off a decline in royalties and a larger pullback in activity in the oilfield services sector.”

Industry and government will also be mindful of any significant interruption to rail or pipeline movement, which could have major impacts on the effort to reduce the oil glut if they occurred. 

Kevin Birn, an oilsands analyst with IHS Markit, said Alberta’s curtailment policy is probably something that’s going to be judged over a longer period of time.

“Yes, differentials have narrowed and that’s a positive metric because the prices we saw prior to Christmas were unsustainable,” Birn said. “But curtailment needs to be measured over a longer period of time.”

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Couple from Toronto buys dream home in Mushaboom

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MUSHABOOM – A couple who lived and raised a family in downtown Toronto developed a five-year plan in 2015 to purchase their dream home.

In September they moved into the home – located on Malagash Island in Mushaboom on Nova Scotia’s stunning Eastern Shore – that met and exceeded their best dreams for their retirement.

The Camerons, Bruce and Tanya, decided in 2019 they would explore the Maritimes to see what real estate was available to become their potential retirement home. In the spring of 2020, during a global pandemic, the real estate boom hit their city, and they were hearing the same for Nova Scotia. Our province was their first-choice for attaining their desire for an entirely different lifestyle – away from the busyness of the city.

“We had $300,000 to $350,000 as a home value in mind to buy. Our semi-detached located off Danforth in Toronto was priced at $850,000. We wanted to come out ahead, so we would be secure in retirement,” Tanya said.

Their century-old home had prime location near the subway and GO Transit Line for a great 13-minute commute downtown.

“We enjoyed our community,” explains Bruce “… we had great neighbours, young children around and street parties – lots of social activity.”

Bruce says, “Our agent suggested a starting quote of $899,000. We did not do any renovations and only some staging. Fifty couples went through and we received four significant offers. Six days later we sold – with zero conditions – and a price of over a million dollars. We just requested a closing of September 2020 to get the kids off to school – which we got.”

The couple got more than they had anticipated.

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Rabobank Announces Leadership Changes in U.S., Canadian Offices

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NEW YORK, Dec. 16, 2020 /PRNewswire/ — Rabobank, the leading global food and agribusiness bank, has appointed two of its top executives, Tamira Treffers-Herrera and Robert Sinescu, to become Co-Heads of North American Client Coverage, positioning the Bank for future growth in the region.

Treffers-Herrera has also assumed the role of Vice Chairperson and Head of the Atlanta office, where she additionally oversees Rabobank Mexico, which is led by Eduardo Palacios. Sinescu is the Head of the Chicago office, and also oversees Rabobank Canada, led by Marc Drouin, who was recently appointed as Canada’s General Manager.

Treffers-Herrera and Sinescu report to David Bassett, Head of Wholesale Banking North America, the Bank’s corporate and investment banking business for the region based in New York.

“Both Tamira and Robert have a demonstrated history of strong leadership, operational excellence and passion for our clients,” Bassett said. “Their broad experience and deep sector expertise will be invaluable in delivering dynamic results for clients while accelerating our growth trajectory in North America.”

Each office will have an even greater focus on key Food & Agribusiness sectors and clients: The Chicago office will drive growth in sectors including Dairy, Farm Inputs and Grains & Oilseeds, which are also key areas of focus for the Canada office. The Atlanta office will focus heavily on sectors such as Animal Protein, Beverages, Sugar, and Supply Chains, which are important sectors in Mexico as well.

“Rabobank is fully committed to our clients throughout North America, and we believe our new sector-focused coverage will improve our ability to provide knowledge-based, value-added solutions that benefit our clients,” Bassett said.

Treffers-Herrera was most recently based in London as CEO of Rabobank’s European Region from 2016-2020, where she took the organization through Brexit. Prior to that, she worked in the Atlanta office from 2002-2016. During her tenure in Atlanta, Treffers-Herrera served as Global Sector Head – Consumer Food & Beverages, and prior to that she was a senior banker for a portfolio of large beverage and consumer foods clients. She holds a Bachelor of Arts degree from the University of Kentucky, a Master of Arts from the Patterson School of Diplomacy and International Commerce and has studied at The University of Chicago Booth School of Business and Harvard Business School.

Sinescu has been with Rabobank for over 21 years and was previously General Manager of Rabobank Canada, where he oversaw all operations, business development, commercial strategy and relationships with regulators. In addition, he continues to serve as CEO of Rabo Securities Canada Inc. Prior to Canada, he was a senior banker, Head of Corporate Banking, European Sector Head for Sugar, and a member of the Management Team for Rabobank France. He holds a Bachelor of Science in Business from the Bucharest School of Business, a Master of Business Administration & Management and a Master of Science in Banking and Corporate Finance from Sorbonne University in Paris, and has studied at Brown University.

Drouin has worked with Rabobank’s Canadian team for more than nine years and most recently served as a senior banker, Head of Rabobank Canada’s AgVendor Program and a member of Rabobank Canada’s Management Team. He brings extensive wholesale banking experience within the Dairy, G&O, CPG and Supply Chain sectors. Drouin holds a Bachelor of Arts degree from McGill University and a Master of Business Administration in International Finance, Marketing and Management from the Schulich School of Business at York University.

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Greybrook Realty Partners & Marlin Spring Brand Jointly Owned Asset Manager – Greyspring Apartments

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TORONTO, Dec. 14, 2020 (GLOBE NEWSWIRE) — Greybrook Realty Partners and Marlin Spring are pleased to announce the new branding of their jointly owned investment and asset management firm, Greyspring Apartments. With a portfolio of more than 2,000 units and CAD$375 million in assets under management, Greyspring Apartments is focused on the acquisition and repositioning of multi-family assets throughout Canada.

The new name and branding is an important step in Greyspring’s evolution as an independent operating business. Formed in 2018 by long standing-partners Marlin Spring and Greybrook Realty Partners, Greyspring Apartments was established with the goal of building a leading asset management firm with a robust portfolio of residential rental real estate assets in primary and secondary markets across Canada.

Greyspring’s talented team of real estate, asset management and finance professionals is overseen and guided by the Management Board, whose members include Benjamin Bakst, CEO, Marlin Spring; Elliot Kazarnovksy, CFO, Marlin Spring; Sasha Cucuz, CEO, Greybrook Securities Inc.; Peter Politis, CEO, Greybrook Realty Partners; Chris Salapoutis, President & COO, Greybrook Realty Partners; Ashi Mathur, President, Marlin Spring; and Karl Brady. In addition to his role on the Management Board, Karl Brady leads Greyspring Apartments as its President. 

“We are pleased to announce the official name and branding of a business we formed with our partners at Marlin Spring a few years ago,” said Peter Politis, CEO, Greybrook Realty Partners. “Greyspring has been diligently focused on the execution of strategic value-add programs across its portfolio that are improving the quality of housing for tenants and overall asset values. For Greybrook investors, expanding from our core business in real estate development to the value-add space through Greyspring, has allowed us to provide our clients with investment opportunities that diversify their real estate investment portfolios.”

“Marlin Spring and Greybrook have partnered on many residential real estate projects in recent years,” said Benjamin Bakst, CEO and Cofounder, Marlin Spring. “To a great extent, Greyspring illustrates our approach to partnerships. We believe in, and strive for, responsible growth through deepening our relationships with our trusted partners. With Greyspring, we’ve formalized our focus on providing better and more affordable living experiences for Canadians. This vision aligns with our mission to deliver exceptional real estate value to all our stakeholders with an uncompromising adherence to our core values.”

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