CAPP sees robust growth for Canadian oil production

By OGJ editors
-- Canadian oil production will increase to 4.7 million b/d in 2025 from 2.8 million b/d in 2010, according to the latest forecast from the Canadian Association of Petroleum Producers (CAPP).

This is about 385,000 b/d higher than previously forecast, due primarily to higher conventional oil production and the inclusion of some additional in situ projects that were previously put on hold. While the forecast calls for more robust growth in Canadian oil production compared with the previous year, it remains less than forecast in 2008.

CAPP’s annual 15-year outlook for Canadian oil production provides a view of prospective changes in supply and integrates the forecast with an updated assessment of potential market options and the corresponding pipelines needed to reach these markets. The report also examines the problems that producers face in finding new markets for rising production.

Conventional oil
CAPP’s forecast for conventional production shows a slight annual increase for the next several years in contrast to the steady annual decline shown in previous outlooks. This can be attributed to the success of horizontal multifracturing technology over the last 3 years combined with the expectation of continued strong medium-term oil prices, which will continue to stimulate investment, the report said.

The forecast calls for total conventional production to climb to 985,000 b/d in 2013 and 2014 from 970,000 this year, then starting to decline in 2015 to 983,000 b/d. By 2020, CAPP forecasts that Canada’s conventional oil production will average 876,000 b/d, and then fall to 749,000 in 2025.

Over the medium term, CAPP forecasts moderate increases in Saskatchewan light oil production. The Bakken play is expected to continue to perform strongly, and there is increased interest in horizontal drilling in emerging oil plays like the Lower Shaunavon in the southwest of the province, the Viking in west-central Saskatchewan around Kindersley, and the Birdbear in the northwest of the province near Lloydminster, according to the report.

CAPP said that similarly, the Cardium formation in Alberta and the Viking formation in central and eastern Alberta and west-central Saskatchewan have been identified as formations well suited for increased use of horizontal drilling since they contain large deposits of oil-in-place with historically low recovery rates.

“Industry continues to focus on acquiring oil well licenses as a result of strong oil prices. Oil-well permitting licenses are up significantly in Alberta, Manitoba, and Saskatchewan—at decade-high rates across western Canada,” CAPP said.

CAPP’s expected forecast for oil sands, which currently comprises 58% of Western Canada’s total oil output, calls for production to jump to 2.156 million b/d in 2015 and to 3.7 million b/d in 2025 from 1.47 million b/d in 2010.

Of the remaining established reserves in Alberta, 80% is considered recoverable by in situ methods while 34 billion bbl can be recovered by surface mining. There are also smaller deposits in northwest Saskatchewan next to the Athabasca oil sands deposit. Recovery of raw bitumen using in situ methods is set to surpass production from mining methods by 2016, according to the forecast.

US market for Canadian crude
US demand for western Canadian oil will reach 2.7 million b/d in 2015, up from 1.8 million b/d in 2010, according to CAPP. Although total US oil demand is not expected to increase much, western Canadian oil should supply a growing share of this market if the necessary pipeline infrastructure is put in place to enable greater access to the major markets.

Declines in exports from other major suppliers to the US is expected in the near term due to a combination of falling production, increased domestic consumption, or a focus on expansion into new export markets such as Asia, the report said.

Despite the expected decline in exports from Mexico and Venezuela, Canadian heavy producers cannot increase their market share on the US Gulf Coast due to infrastructure constraints.

CAPP estimates that in 2015, this Petroleum Administration for Defense Districts III (PADD III) market could receive at least 380,000 b/d of western Canadian oil based on contractual commitments on the Keystone XL pipeline if the pipeline receives US regulatory approvals.

A number of other pipeline projects also are being proposed to transport the current glut of US and Canadian light crude oil in PADD II to the PADD III refinery market, CAPP said.

Related Articles

Cenovus trims budget, slows oil sands work

12/16/2014 Cenovus Energy Inc., Calgary, is trimming its capital spending in response to declining crude oil prices and will slow development of some of its t...

Pengrowth starts commercial steam operations at Lindbergh thermal project

12/16/2014 Pengrowth Energy Corp., Calgary, reported the startup of commercial steam operations at Phase 1 of its Lindbergh thermal project in the Cold Lake a...

Sunshine Oilsands appoints chief executive officer


Sunshine Oilsands Ltd., Calgary, has appointed Luo Hong as chief executive officer and Jiang Qi as president and chief operating officer.

Husky reports start of steam operations at Sunrise oil sands project


Husky Energy, Calgary, reported the start of steam operations at the in situ Sunrise Oil Sands Project in northeastern Alberta.

Kearl resumes oil sands production, Imperial reports

12/09/2014 Imperial Oil Ltd., Calgary, has resumed production at its Kearl oil sands operations in Alberta after a precautionary shutdown due to a “vibration ...

Nexen starts bitumen production at Kinosis 1A in Alberta

12/08/2014 China National Offshore Oil Corp. Ltd. reported the start of bitumen production at the Kinosis 1A (K1A) steam-assisted gravity drainage (SAGD) faci...

Suncor wraps maintenance on Alberta upgrader

12/01/2014 Suncor Energy Inc. has completed 11 weeks of scheduled maintenance on one of two oil sands upgraders at its operations near Fort McMurray, Alta.

Senate debates, then barely rejects, Keystone XL approval bill

11/19/2014 The US Senate finally debated a bill authorizing construction of the proposed Keystone XL crude oil pipeline on Nov. 18 before rejecting the measur...

Cenovus receives approvals for Telephone Lake oil sands project

11/18/2014 Cenovus Energy Inc., Calgary, has received approval from the Alberta Energy Regulator (AER) and the province of Alberta for its wholly owned Teleph...

White Papers

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Available Webcasts

The Future of US Refining

When Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

When Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected