CAPP sees robust growth for Canadian oil production

By OGJ editors
HOUSTON, June 2
-- 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

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...
White Papers

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Emerson Micro Motion Videos

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