Canadian petroleum industry spending will be down sharply this year from the 1991 level, and there is no upturn in sight for 1993.
The Canadian Petroleum Association in its annual spending forecast and review said the industry spent $18.9 billion in 1991, up slightly from 1990. Outlays for 1992 will be at least 20% below 1991 levels because of the depressed financial state the industry.
Mike Ratuski, CPA chief economist, said it is too soon to make a detailed forecast, but increases in activity and employment in 1993 seems unlikely.
CPA pegged total revenues in 1491 from sales of oil, gas, and other products at $18.6 billion, down 14% from $21.6 billion in 1990. Weak oil and gas prices were a major factor in the decline.
The report said federal and provincial governments saw a $1 billion decline in revenues from royalties and taxes in 1991.
CPA reported exploration and capital spending of $7.8 billion in 1991, including $1.3 billion on major projects such as the Caroline sour gas field in Alberta, a heavy oil upgrader in Saskatchewan, and two oil field development projects off the east coast.
Cash flow from upstream operations declined 24% in 1991 and will continue to fall in 1992 but at a slower rate. Industry operating costs increased 6.8% in 1991 over the previous year to $5.8 billion.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
