More moderate growth seen for Canada's oil output
By Scott Haggett
CALGARY, Alberta (Reuters) - Oil production from Canada, the biggest supplier to the United States, will grow at a more moderate pace than earlier projections as regulatory delays and labor shortages stretch oil sands project timetables, an oil-industry group said on Wednesday.
In its annual forecast of Canada's crude oil production through 2020, the Canadian Association of Petroleum Producers said it expects the country will produce 4.5 million barrels of oil per day (bpd) in 12 years, double current output, with U.S. refiners taking the lion's share of the supply increase.
And while the group called for 2015 production from the oil sands of 3.4 million bpd last year, its updated study calls for output from the region to be just 2.8 million bpd as development takes place at a more measured pace.
"This is the reality. The oil sands' potential is still there and it's still in our forecast, but it's just being stretched out a little longer," said Greg Stringham, CAPP's vice-president, markets and fiscal policy. Companies "are finding it now just takes longer from when they start to when they actually have oil."
While the forecast calls for output to more than double from the 2.7 million bpd Canada produced in 2007, the 2020 figure is 100,000 bpd below last year's forecast.
The rise in output will come as more projects are completed in the oil sands region of northern Alberta, which contain 173 billion barrels of oil, the biggest crude reserves outside the Middle East.
But optimistic timetables for completing the complex, multibillion-dollar facilities needed to produce the tar-like bitumen and upgrade it to refinery-ready crude have been stretched to accommodate regulatory delays, rising materials costs and a tight labor pool.
In recent weeks, Norway's StatoilHydro pushed back plans for a bitumen upgrader by two years to 2016, blaming high costs. Total SA of France warned that regulatory delays may lengthen the schedule for its Joslyn oil sands project and North West Upgrading said shaky debt markets were bedeviling financing plans for its C$4.2 billion ($4.1 billion) plant. Continued...