Canada's EDC will backstop bank energy loans

(Reuters, Toronto, 22 April 2020) Canada’s export credit agency will backstop loans to hard hit oil and gas producers, a document seen by Reuters showed, in the latest move by Ottawa to free up credit for the struggling energy industry. The relief comes as banks review borrowing limits in the sector and could head off bankruptcies of small and mid-sized energy firms pummeled by the collapse in oil prices. Canadian banks have eased some lending standards but are expected to chop credit lines as they recalculate energy companies’ borrowing bases to account for a 75% drop in U.S. oil prices since the start of the year. The program is targeted at Canadian firms with production no greater than 100,000 barrels of oil equivalent per day, according to the presentation. In addition, Canada has approved $1.72 billion for cleaning up orphaned or inactive wells in three provinces in western Canada as the federal government tries to help the struggling O&G industry. Last spring, the grass-roots Alberta Liability Disclosure Project estimated that there are 300,000 abandoned wells in the province that could cost $70 billion to remediate.