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The chief executives of several Canadian energy companies are blaming pipeline delays for their inability to access capital for acquisitions or to fund growth, at a time when the sector has already been hit with low energy prices.

Jonathan Wright, president and CEO of NuVista Energy Ltd., said recent delays affecting the Trans Mountain expansion and the Keystone XL projects have amplified the growing investor sentiment that Canada is unable to develop its infrastructure.

“People are really starting to give up on Canada and it’s because we can’t get the pipelines built,” Mr. Wright said in an interview Wednesday. Mr. Wright was one of several chief executives of energy producers who convened in Toronto on Wednesday for the GMP FirstEnergy Energy Symposium.

Brian Schmidt, president and CEO of Tamarack Valley Energy Ltd., acknowledges that a drop in the price of West Texas Intermediate has had an impact, but he blames red tape and pipeline delays for the lack of access to capital.

“I can say this because we were restricted capital before the price of WTI oil fell and the Americans were not,” Mr. Schmidt said in an interview.

While energy prices have begun to recover from the 2014-15 crash, Western Canadian producers have been forced to accept a steep discount for their crude. The lack of pipeline capacity combined with maintenance shutdowns at U.S. refineries have led to surpluses in Alberta, causing the gap between U.S. and Canadian benchmark oil to widen. That, in turn, has hurt the stock prices of Canadian energy producers and made it harder for them to access capital to finance growth, invest in technology or make acquisitions.

Robert Fitzmartyn, head of energy institutional research at GMP, said those oil patch companies that have managed to do mergers and acquisitions have typically seen their stock prices slide significantly after announcing the deal. That effectively amounts to investors punishing companies for doing what they are supposed to be doing – acquiring assets at the low point of the cycle, when prices are comparatively cheap.

“Investors are uncertain because right now fundamentals don’t matter,” Mr. Fitzmartyn said. “It’s preventing activity that otherwise should be going on.”

As for commodity swings, Tamarack’s Mr. Schmidt said producers are used to them.

“We get it, and we live by it and we control our spending by it and our capital allocation is judged by it," Mr. Schmidt said. "But when you have a [West Texas Intermediate] price and you pile on a US$30 differential, that differential is self-inflicted. That’s something that Canada is doing to its own industry because of its lack of infrastructure.”

Mr. Schmidt is hoping for a strategic plan from the federal government to rectify the issue – one which could include legislating the Trans Mountain pipeline expansion project into action or reviving the cancelled Energy East pipeline project.

In the past, energy producers were able to access capital instantly, NuVista’s Mr. Wright said. "If you had a good play and good things to drill, everyone knew the demand would be there. That has almost completely dried up in the last year.”

Meanwhile, oil sands giant Cenovus Energy Inc. on Wednesday called for the Alberta government to invoke existing legislation and impose a broad-based cut in crude production in order to reduce the staggering discounts that companies are receiving for their oil.

Cenovus – which has announced its own temporary production cuts – did not provide an estimate of what would be required to rebalance the market. However, in a recent report, Peters & Co. estimated that production would need to be at least 200,000 barrels a day lower to support prices that have been driven lower by the lack of pipeline capacity.

In Calgary, federal Natural Resources Minister Amarjeet Sohi said he shares Albertan’s “frustration” at billions of dollars being lost to the Canadian economy due to oil price discounts linked to export pipeline capacity constraints. After a speech at an energy forum, Mr. Sohi told reporters the key to building pipelines is building trust in regulatory processes and engaging affected parties early on so that approvals aren’t overturned, as was the case with Trans Mountain.

With files from reporter Shawn McCarthy in Ottawa and The Canadian Press

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