The Alberta Government ordered production cuts to tackle low prices. Credit: Glenlarson / WikiCommons (talk | contribs).

The Canadian Government has unveiled a C$1.6bn ($1.19bn) financial package to support the country’s oil and gas industry, which has been battered by low crude prices and pipeline bottlenecks.

Through the financial support, which will be mostly made available in the form of loans, the government seeks to help companies move beyond the US and look for new export markets.

Around C$1bn ($742.94m) of the financial support would be allocated to companies planning to invest in innovative technologies, boost working capital needs or explore new markets.

Producers in the country achieved a record output of 4.9 million barrels of oil per day this month, Reuters reported citing National Energy Board estimates.

However, companies have struggled to move the crude oil to the US due to transportation bottlenecks that led to steep price discounts.

The aid package offered by Ottawa also comprises C$500m ($371.47m) in commercial financing to be made available to high-risk oil and gas companies over a period of three years to help them weather current market conditions.

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“We know that getting our resources to non-US markets is the long-term solution to ensuring every barrel of oil gets its full value.”

Companies can use the commercial loans to enhance operational and environmental efficiency, and invest in new technology and equipment.

The government is investing an additional C$100m ($74.29m) in oil and gas projects through Natural Resources Canada’s Clean Growth Programme. The projects will adopt new technologies to improve production and environmental performance of the industry.

Canada Natural Resources Minister Amarjeet Sohi said: “The oil and gas industry is core to Canada’s economy. These investments will help protect jobs and restore competitiveness during this difficult time.

“We know that getting our resources to non-US markets is the long-term solution to ensuring every barrel of oil gets its full value. That remains our focus, and we will continue to work hard to deliver results.”

Last month, Alberta crude fell to $11 per barrel due to transportation issues.

The Alberta Government unveiled plans to buy more rail cars to transport additional oil and ordered producers to reduce output from next month in an effort to reduce the province’s supply and improve the price.