Study sees pause in oil sands output growth
By OGJ editors
HOUSTON, Feb. 5 -- The oil price slump will stall for several years but not reverse growth of production from Alberta's deposits of oil sand and heavy oil, says the Canadian Energy Research Institute (CERI).
A report by David McColl, CERI chief economist, forecasts oil sands production of 1.9-2.9 million b/d in 2015 and 3.7-5.4 million b/d in 2030.
Oil sands production in 2007, the last full year for which an annual average is available, was 1.2 million b/d, according to the Canadian Association of Petroleum Producers.
The new CERI projection updates estimates published last June, before crude oil prices fell.
The reference-case forecast at that time was for steady growth of oil sands production to 3.4 million b/d by 2015 and 5 million b/d by 2030.
The new outlook assumes the price of West Texas Intermediate crude stays below $60/bbl for most of 2009 and credit markets continue to lack liquidity. It assumes economic recovery begins in early 2010, with liquidity slowing returning to the economy.
Growth in oil sands output will not resume until 2 years after the economy recovers, McColl says. It initially will be limited to established oil sands projects and others with financing in place before the credit collapse of last year.
The new forecast cuts the estimate for investment in new oil sands production to $218 billion (Can.) from $315 billion in the reference-case outlook last year.
The study assumes that expansion of the oil sands industry requires a WTI price above $70/bbl.