By OGJ editors
HOUSTON, Sept. 28 -- Canadian oil activity is picking up in response to higher oil prices, although the oil-related activity has been overshadowed by gas drilling in Western Canada, the National Energy Board (NEB) said in a recent report.
In its Short-term Outlook for Canadian Crude Oil to 2006, NEB noted growing oil production volumes stemming from oil sands and reserves off Newfoundland and Labrador, including development of Hibernia, Terra Nova, and White Rose fields.
Overall, conventional production from Western Canada Sedimentary Basin, both light and heavy, is in decline. Canada last year produced 2.5 million b/d of crude oil, of which 2.2 million b/d came from the WCSB.
Meanwhile, production gains from off the East Coast and the oil sands are offsetting WCSB's decline, NEB said.
"In 2005, total production is projected to be about 3% below 2004 levels primarily due to operational problems experienced at all three integrated oil sands mining and upgrading plants," the NEB report said. "By yearend 2006, however, total Canadian production is projected to increase substantially to 2.9 million b/d as mined bitumen, in situ bitumen, and East Coast offshore production expand."
Canada consumed 977,000 b/d of Canadian crude oil and imported 950,000 b/d during 2004, and it exported 1.6 million b/d of crude oil to the US. Overall, Canada was a net exporter of 630,000 b/d.
Issues facing the oil industry include insufficient supply of diluent to transport heavy crude oil to market, lack of heavy crude pipeline capacity out of the WCSB, price volatility, and lack of coking capacity for the growing supply of crude from oil sands, the NEB report said.