Canada oil industry raises growth forecast, calls for pipelines
(Reuters) - Canadian crude output will grow by a third to 5.1 million barrels per day (bpd) by 2030, even as capital spending drops for an industry beset by challenges, the country's main oil lobby group said on Tuesday, raising predictions for the first time in four years.
The production rise comes mainly from the oil sands and is an increase of 32.5 percent from last year's output of 3.85 million bpd and a 4 percent increase from last year's forecast of 4.9 million bpd by 2030, the Canadian Association of Petroleum Producers (CAPP) said in an annual report.
The last time CAPP increased its forecast for 2030 was in 2013, when it predicted 6.7 million bpd of production, up from 6.2 million bpd predicted in 2012.
Such a boost in production highlights the need for pipelines for the largely landlocked industry, whose a lack of export routes depresses prices, CAPP said.
"We have been operating in a pipeline world where we have been at full capacity," CAPP President Tim McMillan said in a conference call. "It's like a freeway that's always in gridlock."
Canada has the world's third-largest crude reserves, but bids to build new pipelines have faced fierce environmental opposition.
Major projects at various stages of approval include Enbridge Inc's (ENB.TO: Quote) Line 3 replacement, Kinder Morgan Inc's (KMI.N: Quote) Trans Mountain expansion and TransCanada Corp's (TRP.TO: Quote) Keystone XL and Energy East.
McMillan said the industry needs all of them.
Also on Tuesday, the Canadian Association of Oilwell Drilling Contractors forecasted 6,842 wells to be drilled this year, a 2,177 increase from its previous prediction, citing price stabilization. Continued...