UPDATE 2-Western Canada's crude output to keep growing -industry group
(Adds quotes from McMillan)
By Nia Williams
CALGARY, Alberta Jan 21 (Reuters) - Western Canadian crude production will ramp up in 2015 despite plunging oil prices, the Canadian Association of Petroleum Producers said on Wednesday, although the industry body trimmed its forecast by 65,000 barrels per day to 3.6 million bpd.
Despite the slight slowdown, crude output from Western Canada, which includes northern Alberta's vast oil sands, is still on the rise thanks to the billions of dollars that producers have sunk into multi-year projects.
CAPP's short-term review of its annual forecast underlines how plunging global benchmark crude prices are failing to dent oil sands production.
In contrast, many analysts expect the U.S. shale oil industry to stop growing by mid-2015.
CAPP's 2015 forecast is around 150,000 bpd higher than total 2014 output of 3.5 million bpd. It expects Western Canadian production to hit around 3.8 million bpd by 2016, although that forecast is 120,000 bpd lower than the one released last summer.
"A large portion of what we are seeing in growth is oil sands growth. Those are investments that are made over as much as a decade," CAPP President Tim McMillan said. "The current price environment wouldn't affect whether they come on stream or not because those costs are out of the door."
However, McMillan said conventional crude production, which includes the Duvernay and Montney shale formations in Western Canada, will be flat over the next few years at around 1.3 million bpd before starting to drop as old wells decline. Continued...