Global Petroleum Show kicks off in Calgary amid uncertainty over sector growth in Canada
CALGARY -- The Canadian Association of Petroleum Producers is predicting the country's oil production will increase by 1.4 million barrels per day by 2035, despite an ongoing "competitiveness gap" that discourages investment.
The group, which represents Canada's upstream oil and gas sector, says total Canadian oil production will increase to 5.6 million bpd in the next 17 years mainly due to a rise in oil sands production to 4.2 million bpd from 2.65 million bpd in 2017.
It says Western Canada's non-oil sands crude production will be flat at about 1.3 million bpd in 2035.
Output in Eastern Canada is expected to rise to 290,000 bpd by 2025 from major offshore projects including Hebron, Hibernia, Terra Nova, and White Rose, CAPP says, adding production will then drop to just 70,000 bpd by 2035 as oil is pumped out.
CAPP says Canada's oil output exceeded its transport capacity in 2017 as proposed pipelines including TransCanada's (TRP.TO) Keystone XL project, the expansion of the Trans Mountain (KML.TO) pipeline (despite being sold to the federal government) and Enbridge's (ENB.TO) Line 3 pipeline replacement face uncertainty.
It says capital spending in the U.S. rose 38 per cent to $120 billion in 2017 while investment in Canada fell to $45 billion.
"Canada is falling behind its competitors, losing the opportunity to supply the world with oil produced the Canadian way. The U.S. is increasing its oil exports to the same emerging markets Canada is targeting," CAPP president Tim McMillan said.
A year ago, CAPP forecast Canadian oil production would climb by 33 per cent to 5.12 million barrels per day by 2030, up from the 2016 prediction of 4.93 million bpd.
McMillan delivered the forecast at the Global Petroleum Show, a three-day oil and gas marketplace and conference which is reporting robust attendance after suffering smaller crowds in the years following the oil price collapse of 2014.