Decline in oil prices is slowing down the growth of Canada's oil production over the next two decades,听the Canadian Association of Petroleum Producers (CAPP)听says in its听2015 Crude Oil Forecast, Markets and Transportation report.
CAPP projects Canada's oil production will increase 43 percent until 2030, growing to 5.3 million barrels a day, from听3.7 million barrels of oil per day in 2014.听
The association听projected in its June 2014 report that听the country's oil production would听average 6.4 million barrels a day in 2030. 听
"While the two forecasts are similar during the early years of the forecast period, the slower pace of production in the latter years is the result of reduced capital spending intentions due to the sharp decline in global oil prices,"听CAPP said in its 2015 report.听
Greg Stringham, CAPP鈥檚 vice-president for听oil sands and markets, said that demand for Canadian oil in eastern Canada, the U.S. and worldwide remains strong, but added "We have the energy the world needs 鈥� our challenge is getting it there."
The report stressed that all forms of increased transportation capacity is听needed to meet growing domestic and international demand for Canadian oil.
"Connecting Canada鈥檚 growing supplies to these markets safely and competitively is a top priority. Over the next two decades, we believe all forms of transportation will still be needed to move Canadian oil to markets to the east, west and south," Stringham elaborated.听
- Markets for Canadian oil
"Several pipeline projects are at various stages in the regulatory process,"听Stringham said. "These projects target three different markets and would provide Canadian producers with the market access necessary to become a truly global supplier."
CAPP'S report indicated that听refineries in Quebec and Atlantic Canada, on the east of the country,听import nearly 80 percent of their oil from foreign sources at the moment.听
There is also increasing demand for Canadian oil听from the western U.S. states of Washington and California, in addition to Asia and Europe, according to the report.听
The U.S. Gulf Coast, with its massive refinery capacity听and ability to process heavy crude oil, like Canada's oil sands, is also a major potential oil market for Canada to grow.听
CAPP said oil听pipelines are still听the primary mode of transportation for听large听volumes, but delays in听construction proposals make听railways听a complementary method of transportation to pipelines.听
- Oil production in Canada
Oil sands,听also known as tar sands,听a type of听unconventional petroleum deposit听from which crude oil can be produced, is still the听primary driver of oil growth in Canada.
Production from oil sands is expected to听reach听four million barrels a听day by 2030, according to CAPP.听
Meanwhile, conventional oil production in western Canada, including condensates, is forecast to reach听1.3 million barrels a听day by 2030, bringing听the total oil production to 5.3 million barrels a day in 2030.听
CAPP pointed out to the uncertainty in the market due to the low oil prices, saying that Canadian oil producers are still evaluating their growth plans for future projects.听
"Total oil and natural gas industry capital investment is forecast at C$45 billion in 2015, down nearly 40 percent from C$73 billion in 2014. In the oil sands, 2015 capital investment is forecast to be lower by almost a third to C$23 billion compared to C$33 billion in 2014," CAPP said in the report.听
By Ovunc Kutlu
Anadolu Agency
ovunc.kutlu@aa.com.tr
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