Canada: High Dollar A Cash Drain On Oilpatch

‘We Hate It’; Discourages U.S. investment, hurts energy exporters

CALGARY – Canada’s high-flying buck is known internationally as a petro-dollar, but the country’s petroleum sector is anything but pleased.

“We hate it,” said John Diel-wart, chief executive of ARC Resources Ltd., a large oil-and-gas trust.
“The strength of Canada’s economy and the strength of our dollar is directly tied to the strength of our energy industry,” he said. Yet, “all of our revenue comes in U.S. dollars, all of our expenses come in Canadian dollars. It hurts the sector, just as it does any business that exports.”

With 65% of oil and 55% of natural gas produced in Canada exported to the United States, Canadian oil companies say the strong dollar is one of the key factors that led to a sharp pullback in activity in the natural-gas side of the business, while making oil projects look less attractive than only three years ago.

“A US$80 a barrel of oil today is worth the same as a US$52 barrel oil when the exchange rate three years ago was US65