Canadian oil production growth could slow down or freeze altogether: report

CALGARY -- Growth in Canadian oil production is likely to slow down or grind to a halt five years from now once projects now under construction are built, the International Energy Agency warns in a report released Monday.

See Full Article

The Paris-based organization said it projects Canada to add 800,000 barrels a day of production by 2021, which would bring total output to 5.2 million barrels a day. Most of that growth is expected to come from Alberta's oilsands, with bitumen production expected to hit 3.4 million barrels a day.

But a number of factors including the expense of producing crude from the oilsands threaten to curtail or put a stop to such growth, the IEA said.

"Heightened environmental concerns, a lack of pipeline access to new markets and the unknown impact of the victory by the New Democratic Party in Alberta's elections last year are causing companies to slow development," it said.

"As such, we are likely to see continued capacity increases (in) the near term, with growth slowing considerably, if not coming to a complete standstill, after the projects under construction are completed."

A number of new developments in Canada recently commissioned or nearing completion will drive growth over the next five years, the IEA said. They include Imperial Oil's Kearl expansion project in Alberta, which was completed in June 2015, and the Hebron offshore oil site off Newfoundland set to begin production in 2018.

The IEA report, which examined global oil production forecasts up to 2021, said there was a 24 per cent cut in oil investment around the world last year and another 17 per cent reduction is expected this year.

Jackie Forrest, vice-president of energy research at Arc Financial, agreed that oilsands development will slow down as companies look to smaller investments and faster returns.

"There is a lot of uncertainty about future growth and a lot of headwinds coming at the oilsands," said Forrest. "Even if you assume a price recovery, there's more of a favour for shorter cycle-type projects, unlike the oilsands which are megaproject investments."

A decline in the number of new projects would significantly change the dynamics of the oil sector's workforce from growth to maintenance, the industry-funded Enform organization said last week.

It projects that the number of construction jobs will drop by 84 per cent, or about 10,300 positions, by 2020, while the number of operations and maintenance jobs would grow by 9,870.

Since mid-2014, crude prices have plunged by 70 per cent. On Monday, oil was trading above US$33 a barrel.



Advertisements

Latest Economic News

  • How to fight back against rising bank fees on chequing accounts

    Economic CBC News
    Canada's big banks continue to enjoy big profits. But that hasn't stopped them from charging customers a host of personal banking fees. In fact, fees have become an ever more important part of their revenues. Source
  • Bogus bongs or bogus lawsuits? Pipe maker sues over fakes

    Economic CTV News
    FORT LAUDERDALE, Fla. -- Don't want to bum your buzz, but that expensive bong you got cheap to smoke your pot may be bogus. High-end German glass water pipe maker Roor and its American licensee are filing lawsuits against smoke shops and mom-and-pop convenience stores in Florida, California and New York. Source
  • 'There isn't a best card out there': How to choose a credit card that works for you

    Economic CBC News
    Credit cards are sometimes lambasted as high-cost consumer debt that can quickly get borrowers into trouble. But if you pay off the balance each month, credit cards can also have significant perks. Loyalty programs like Air Miles, which has both a standalone program and partnerships with credit cards, have drawn a lot of criticism lately, but Canadians are still attached to credit cards that offer rewards. Source
  • Chevron says it has won the latest round in an Ecuadorian legal battle

    Economic CTV News
    Oil giant Chevron Corp. says it has won a round in the Canadian courts in a complex legal battle with a group of Ecuadorian villagers who are trying to collect on a massive judgement they won in Ecuador's courts. Source
  • Liberals ask President Trump to approve Keystone XL pipeline

    Economic CTV News
    Canada’s natural resources minister says that he hopes the new U.S. administration will allow the Keystone XL pipeline quashed by Barack Obama to proceed, noting that all Canadian regulatory approvals are in place. Jim Carr spoke to CTV’s Power Play from Washington, D.C. Source
  • Apple depicts Qualcomm as a shady monopolist in US$1B lawsuit

    Economic CTV News
    SAN FRANCISCO -- Apple is suing mobile chip maker Qualcomm for $1 billion in a patent fight pitting the iPhone maker against one of its major suppliers. The 100-page complaint filed Friday in a San Diego federal court depicts Qualcomm as a greedy monopolist abusing its power in a key segment of the mobile chip market to extort royalties for iPhone innovations that have nothing to do with Qualcomm's technology. Source
  • Trump's 'America first' tone worries head of Canadian oil and gas industry group

    Economic CTV News
    Trump takes charge: Sworn in as 45th president of the U.S.A. Source
  • Obama administration urges Canada to reverse Super Bowl ad decision

    Economic CTV News
    OTTAWA - In one of its final communications with Canada, the outgoing Obama administration is engaging in pigskin politics: asking the Trudeau government to overturn a regulation affecting ads during the Super Bowl. The U.S. Source
  • Oil and stock prices higher as Donald Trump sworn in

    Economic CBC News
    Stock markets responded to the first day of the Trump Administration in a largely positive way, with the Dow Jones, the Nasdaq and the S&P 500 all higher on the day of his swearing in. The Dow Jones Industrial Average was up by nearly 100 points to 19,829 just minutes before the new president formally acceded to the position. Source
  • Stocks higher as Donald Trump lays out glimpse of future economic policies

    Economic CBC News
    Stock markets responded to the first day of the Trump Administration in a largely positive way, with the Dow Jones, the Nasdaq and the S&P 500 all higher on the day of his swearing in. The Dow Jones Industrial Average was up by nearly 100 points to 19,829 just minutes before the new president formally acceded to the position. Source