Canada's petroleum industry expects a closer balance between exploration for oil and for gas, says a survey by Arthur Andersen & Co., Calgary.
The autumn survey of 65 operators found 63% believe oil demand will increase for the balance of the decade and significant reserves remain to be discovered. A total of 59% of respondents said they will balance exploration targets between oil and gas.
By contrast, a survey last April found only 45% expected increased oil demand, and 52% said significant reserves remain to be found.
Gas prices have weakened in the past 6 months, and intensive exploration has increased reserves.
While gas exploration plans are easing, all respondents in the most recent survey expect major gas discoveries for the rest of the 1990s. Most respondents forecast growth in the gas industry of 2-4%/year for the balance of the decade.
Gas prices were forecast at $1.85 (U.S.)/Mcf in 1995, increasing to $2.40 by 1999. Oil prices were forecast at $18 (U. S.)/bbl in 1995 for West Texas intermediate, rising to $24/bbl in 2004.
The survey also showed 91% of companies will need more capital for expansion but only 37% expect to find investors to put up the money. Companies that cannot find capital likely will be part of increasing merger and acquisition activity, and be taken over by others.
Copyright 1994 Oil & Gas Journal. All Rights Reserved.
Issue date: 11/21/94
