Canadian spending for capital and exploration items will ease out of the doldrums this year.
Total outlays will amount to $8.44 billion, an increase of 7.6% from 1989 spending. Upstream spending will rise 7% to $4.96 billion, while downstream outlays will climb 8.4% to $3.48 billion.
Canadian spending fell 8.1% to $7.85 billion last year. Exploration and production spending fell 20.9% to $4.64 billion, and downstream spending moved up 20% to $3.2 billion.
The Canadian Petroleum Association and Independent Petroleum Association of Canada, which represent most companies in the industry, also forecast increased activity this year (OGJ, Feb. 5, p. 33).
The industry groups said operators are budgeting for average prices of $18.50 (U.S.)/bbl for crude oil and $1.65/Mcf for gas.
SPENDING BREAKOUT
Gas pipeline construction will represent the largest category of Canadian downstream spending this year, just as it did in 1989.
Gas pipeline spending is projected at $1.069 billion, almost 21 % more than in 1989. The projected outlays will go mostly to beef up capacity to export western Canadian gas to the U.S.
A 55.9% drop is expected in Canadian crude and products pipeline spending to $26 million.
Interprovincial Pipe Line Ltd. last fall shelved plans for a $1.1 billion, multiyear expansion of its crude oil pipeline system because of declining oil production, cancellation of development projects, and talks with industry (OGJ, Oct. 23, 1989, p. 22).
Canadian refining outlays are expected to increase 7.3% to $559 million this year. Marketing expenditures will rise 4.1% to $611 million.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
