CAPP alters Canadian oil sands production outlook

July 7, 2008
The Canadian Association of Petroleum Producers (CAPP) has released its annual crude oil production from oil sands outlook, which is slightly altered from its earlier report.

The Canadian Association of Petroleum Producers (CAPP) has released its annual crude oil production from oil sands outlook, which is slightly altered from its earlier report.

CAPP’s 2008 Canadian crude oil supply outlook evaluates two cases, both extending to 2020. The moderate growth case represents the expected outlook, and a more-aggressive pipeline planning case was also developed.

In the moderate growth case, total Canadian crude oil production, including conventional, oil sands, and Atlantic offshore, was projected to increase to almost 4.5 million b/d in 2020 from 2.7 million b/d in 2007.

In the pipeline planning case, production rises even more—to 5 million b/d.

Oil sands continue to be the main source of Canada’s growing oil supply, said CAPP, which estimates industry will invest about $20 billion on oil sands development during 2008.

In the 2008 forecast, CAPP extended its anticipated oil sands growth over a slightly longer time frame, which resulted in a slightly lower production profile in the 2008 forecast than in 2007.

Oil sands outlook

CAPP took a poll of oil sands producers in early 2008 to obtain their current and planned oil sands production through 2020.

“The growth in oil sands remains significant; the potential for oil sands growth is unchanged, but this will be accomplished over a longer period,” said Greg Stringham, CAPP vice-president, markets and fiscal policy.

“Even with growing world demand and higher global prices for oil, oil sands projects take substantial time and effort to address issues such as rising construction costs, labor constraints, public concerns about environmental impacts, and completing detailed regulatory processes,” Stringham said.

Recent trends indicate the year-over-year decline rate for conventional crude oil production has slowed somewhat due to higher crude oil prices and that production has increased slightly in Manitoba and Saskatchewan, CAPP said. However, due to the maturity of the Western Canada Sedimentary Basin, conventional crude oil supply is expected to decline gradually over the forecast period.

In order to accommodate the expected growth in oil sands supply, 1.1 million b/d of pipeline capacity is being added from Western Canada through yearend 2010. CAPP believes that capacity should be sufficient until 2013.

“Subsequently, additional pipeline capacity will be required to meet expected oil sands growth. This new pipeline capacity will include expansions into existing markets and extensions into new markets in Eastern Canada, the US, and potentially to offshore markets,” said CAPP, which represents 150 companies that explore for, develop, and produce natural gas, natural gas liquids, crude oil, and oil sands.

CAPP member companies produce more than 95% of Canada’s natural gas and crude oil.