IHS: Oil sands output to rise 1 million bbl during 2016-25

Oil sands production is forecast to increase nearly 1 million b/d by 2025, driven primarily by the expansion of existing facilities with more attractive economics, according to analysis from IHS.

Content Dam Ogj Online Articles 2016 06 Ihs Oil Sands Production

Oil sands production is forecast to increase nearly 1 million b/d by 2025, driven primarily by the expansion of existing facilities with more attractive economics, according to analysis from IHS.

Although that pace is below historical levels, it will keep Canada among the largest sources of global oil supply growth, IHS notes.

Construction of projects that started before the fall in oil prices—and where significant capital has already been invested—will be complete by 2018, after which construction activity could cease.

The subsequent completion and then ramp up of these facilities will drive growth to 2020. IHS expects more than 75% of future activity to come from the expansion of existing facilities.

Content Dam Ogj Online Articles 2016 06 Ihs Oil Sands Production

“As we saw with tight oil producers, when prices collapsed, they focused their activity on the most productive areas,” said Kevin Birn, director for IHS Energy. “We expect a similar experience to play out in the Canadian oil sands. However, given the nature of the long lead times, we expect this will play out over the coming decade.”

An additional factor supporting future oil sands growth is the lack of production declines from existing oil sands projects. If oil sands facilities are maintained, their production levels do not decline, which is unique compared to other types of oil production globally. This means that each investment in new oil production results in net growth, IHS says.

More in Drilling & Production