Thursday July 24, 2014

QUESTION OF THE WEEK

Survey results are meant for general information only, and are not based on recognised statistical methods.




Oil production expected to grow

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Canadian oil production is projected to grow steadily by an annual average of four per cent, or 175,000 barrels per day (bpd), through to 2030, according to the 2014 Crude Oil Forecast from the Canadian Association of Petroleum Producers (CAPP).

CAPP expects that total Canadian crude oil production will increase to 6.4 million bpd by 2030, compared to 3.5 million bpd in 2013.

“Global demand for oil continues to increase, and Canada’s large reserves make it an attractive supply source for markets in the United States and beyond,” said CAPP vice-president Greg Stringham. “Connecting Canadian supplies to these markets, safely and competitively, remains a key priority for our industry.”

CAPP projects that conventional oil production in western Canada will increase from 1.3 million bpd in 2013 to 1.4 million in 2015, and 1.5 million in 2020. It will then hover at the 1.5 million mark through 2030.

"Conventional oil production continues to reverse its previous long decline because of the continuing use of horizontal and multi-fracturing drilling techniques," CAPP stated in its report.

"Increased drilling in liquids-rich areas has also reversed a declining production trend for condensates, a light oil often used as diluent in the oil sands.

As for the oil sands, they are expected to increase production from 1.9 million bpd in 2013, to 2.3 million in 2015, 3.2 million in 2020, 4.1 million in 2025 and 4.8 million in 2030.

Eastern Canada's production will remain around 200,000 from 2013 to 2015, then increase to 300,000 in 2020, before tapering off to around 200,000 in 2025 and 100,000 in 2030.

As oil production increases, CAPP says that more transportation capacity is required to move products to new and existing markets. Several projects are at various stages in the regulatory process, and others are being considered.

They include pipelines to the east and west in Canada, and south to the U.S. The projected growth in production is dependent on expansion of transportation capacity to a portfolio of market opportunities.

For comparison, CAPP’s 2013 forecast estimated total production in 2030 at 6.7 million bpd, oil sands production at 5.2 million bpd, and conventional production at 1.4 million bpd.

CAPP’s annual forecast is developed from oil producer survey data and CAPP analysis of historical trends, expected drilling activity, recent announcements and ongoing discussions with industry stakeholders and government agencies.

CAPP does not forecast oil prices.

The association represents companies that explore for, develop and produce natural gas and crude oil throughout Canada. CAPP’s member companies produce about 90 per cent of Canada’s natural gas and crude oil.

 


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