CANADIAN OIL FIRMS PLAN 16.7% SPENDING HIKE

Canadian petroleum industry capital and exploration spending is expected to jump 16.7% to $9.6 billion in 1991 from 1990 levels. Canadian capital spending in 1990 slipped 0.8% from 1989 outlays. Exploration and production spending will pace the 1991 increase, moving up 22.1% to $6.5 billion. Canadian E&P spending rose 4.9% last year. OGJ projects a 4.8% increase in Canadian well completions to 6,518 in 1991 from 1990 levels (OGJ, Jan. 28, p.

Feb. 18, 1991

2 min read

Canadian petroleum industry capital and exploration spending is expected to jump 16.7% to $9.6 billion in 1991 from 1990 levels.

Canadian capital spending in 1990 slipped 0.8% from 1989 outlays. Exploration and production spending will pace the 1991 increase, moving up 22.1% to $6.5 billion. Canadian E&P spending rose 4.9% last year.

OGJ projects a 4.8% increase in Canadian well completions to 6,518 in 1991 from 1990 levels (OGJ, Jan. 28, p.

64). Canadian non-E&P spending also is expected to rise in 1991, increasing 6.9% to $3.1 billion. In 1990 nonE&P spending fell 9.8% from 1989 levels.

Refining/marketing outlays will lead non-E&P Canadian spending growth in 1991. Refining spending will rise 16.4% to $583 million, while marketing outlays will increase 20.7% to $695 million.

ASSOCIATION FORECASTS

Late last year Canadian Petroleum Association (CPA) forecast a substantial increase in 1991 Canadian E&P spending (OGJ, Nov. 26, 1990, p. 31).

CPA projected an increase of more than 20% in E&P spending to $6.8-7.2 billion and 6,500 well completions.

The Independent Petroleum Association of Canada (IPAC) predicts upstream revenues in Canada will decline 3.6% this year to $21.3 billion (Canadian) from 1990 levels.

IPAC forecasts drilling in Canada will increase to 6,200 wells in 1991 from about 5,800 in 1990. IPAC also believes the industry reinvestment rate will surge to more than 95% this year from 72% in 1990. Overall industry investment is expected to increase almost 20% to $7.5 billion (Canadian).

COMPANY PLANS

Bow Valley Industries Ltd., Calgary, plans to boost 1991 capital outlays by 17% to $241 million (Canadian) from 1990 levels.

Bow Valley plans to fund its 1991 program mainly from internal cash flow with a modest level of debt.

In western Canada, Bow Valley will target more drilling on medium and deep gas prospects. Its plans also include the first deep test of a farmout in the St. Lawrence lowlands of Quebec.

The company plans to hike worldwide exploratory drilling outlays this year by 10% to $50 million (Canadian).

It expects to drill four wildcats in the North Sea-including a well that Bow Valley will operate on Block M/3 in the Dutch North Sea-and 11 exploratory wells in Indonesia.

PanCanadian Petroleum Ltd., Calgary, plans to spend about 35% of its $415.3 million (Canadian) capital budget on exploration.