Canada oil output growth upgraded by 500,000 bpd

Tue Jun 5, 2012 1:59pm EDT
 
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Canadian oil output is poised to surge ahead far faster than expected only a year ago, the industry's main lobby group said on Tuesday, boosting its forecast for 2020 production by half a million barrels a day.

Total output from the United States' top energy supplier is now expected to jump by 57 percent to 4.7 million barrels per day by the end of the decade due to a new boom in light oil from shale and other tight rock formations and from multibillion-dollar investments in oil sands projects, the Canadian Association of Petroleum Producers said in its closely watched annual outlook.

A year ago it said output would hit 4.2 million bpd.

Light crude from the Bakken region of Saskatchewan and similar formations in Alberta, coaxed to the surface with the aid of horizontal drilling and hydraulic rock fracturing, represents a surprisingly large part of the new projected gain, CAPP vice-president Greg Stringham said.

Light oil output had been waning steadily for more than a decade as fields matured and the Alberta oil sands played an increasingly dominant role in Canadian energy production.

CAPP now sees conventional light and heavy crude climbing to 1.3 million bpd in eight years from 1.1 million in 2011.

"We saw a little resurgence starting last year and it was so early we didn't want to go overboard, but that resurgence has continued and is much stronger this year. It's making up almost half of the growth we're seeing in 2020-2025," Stringham said.

Down the road, overall Canadian production is projected to increase to 5.6 million bpd by 2025 and 6.2 million by 2030.   Continued...