Capital investment in Canada’s oil sands is expected to hit $23 billion this year, about 30% less than last year as lower oil prices and stalled multibillion-dollar pipeline proposals challenge high-cost projects.
In a report released Tuesday, the Canadian Association of Petroleum Producers (CAAP) said the country’s overall oil production is expected to reach 5.3 million barrels a day by 2030, which is 1.1 million barrels per day lower than expectations a year ago.
“The Canadian crude oil industry is facing risks on multiple fronts in a market transformed by increased global crude oil supplies resulting in lower oil prices,” the group said in its annual outlook.
Despite the challenges, the industry body says it expects growth in the oil sands sector. According to the report, they remain the primary driver of oil growth in Canada, with production reaching four million barrels per day by 2030, said CAAP. Conventional oil production in Western Canada, including condensates, is projected at 1.3 million barrels per day by 2030, while Eastern Canadian offshore production is forecast at 91,000 barrels per day by 2030, the Calgary-based group said.
Greg Stringham, CAPP’s vice-president, oil sands and markets noted demand for Canadian oil in Eastern Canada, the United States and globally remains strong.
“We have the energy the world needs – our challenge is getting it there,” he said in a statement.
The group said that several multibillion-dollar pipeline proposals remain bogged down by entrenched opposition or lengthy regulatory processes, curtailing the industry’s ability to reach higher-priced markets.
“These projects target three different markets and would provide Canadian producers with the market access necessary to become a truly global supplier.” Stringham concluded.