Newfoundland and Labrador Premier Dwight Ball says there is no plan to slow oil production at this time, even though the world's largest key oil cartel is cutting production.

On Sunday, OPEC and other petroleum producers agreed to slash oil production by nearly 10 million barrels a day to try to slow the drastic decline in the price of oil.

Among the provinces, Newfoundland and Labrador is the third largest producer of oil in Canada, behind Alberta and Saskatchewan.

Dwight Ball told reporters during Monday's COVID-19 briefing the province is producing less than 300,000 barrels of oil a day.

"It would have a major impact on our province but yet not a big impact on the national production," Ball said.

"The discussions that we've had last week with the provincial minister and with our federal minister, that's not something that we've been asked to do."

The Hibernia oil platform drills for oil off Newfoundland's east coast. (CBC)

Federal Natural Resources Minister Seamus O'Regan, who is also MP St. John's South-Mount Pearl, calls the agreement over the weekend good news.

"The federal government is deeply concerned about oil price instability and the impact on thousands of workers in Canada's energy sector, and their families," O'Regan said.

O'Regan was part of a virtual G20 meeting on Friday, where he said he was pleased all leaders agreed action had to be taken to stabilize oil prices.

"It's not the be-all end-all by any means, but it's heading in the right direction," O'Regan told The St. John's Morning Show on Tuesday.

O'Regan said one of the key things will be ensuring oil companies have the liquidity they need to get through. He said incentives to continue production after the pandemic will also be a part of the assistance.

"We're discussing them right now and we'll have a package together, I'm thinking very soon," O'Regan said.

Brent crude, the standard for Newfoundland and Labrador, is trading at around $31 a barrel. Western Canadian Select, meanwhile, has fallen to around $6 per barrel.

"A foot-long sub is now more expensive than a barrel of oil," O'Regan said.

Royalties will continue to take hit

Ball said it will take months to see the price of oil rise with the reduction by OPEC, which is a 10 per cent cut of global oil production.

Still the plummeting oil price will have this province losing out on lots of much-needed money.

"It's in the hundreds of millions of dollars for sure, and of course for us when you get royalties, this would be about a billion dollars," said Ball.

Ball said before the COVID-19 global pandemic, oil production had already slowed in N.L.

"Right now it's important for us that we make sure we continue to make that argument and with the federal government the important role that this energy sector, the oil and gas sector, plays within Newfoundland and Labrador and that there will be support," he said.

Oil companies have deep concerns

Charlene Johnson, president of Newfoundland and Labrador Oil and Gas Industries Association — known as Noia — hopes the production cuts will bring stability back to the province's offshore oil revenues.

She doesn't believe Newfoundland and Labrador will have its production slashed, since 300,000 barrels a day is a small fraction of global production.

"That is less than a percentage of a percentage. At a local level we are very small in the grand scheme of things," Johnson said.

Noia CEO Charlene Johnson says the association's members have grave concerns about the state of the economy. (CBC)

Noia has circulated a survey among its members and found some stark numbers in the responses:

52 per cent of members have laid off some or all of its staff.

43 per cent expect more layoffs in the future.

40 per cent say they cannot survive if the current situation drags on another six months.

Hibernia is also facing a halt to drilling that could last as long as 18 months.

Production would continue with one drilling rig throughout the shutdown.

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