IHS Markit expects average y/y supply additions to be below 100 000 bpd in the coming decade. By contrast, growth over the current decade regularly averaged additions in excess of 150 000 bpd.
Transportation constraints such as a lack of adequate pipeline capacity and the resulting sense of price insecurity in western Canada have weighed on new large scale incremental investments in the oil sands, said Kevin Birn, Vice President, IHS Markit – who heads the Oil Sands Dialogue.
“Large scale oilsands projects take two, three, four or more years to be brought online and so the reality of a slower pace of investment and growth in the Canadian oilsands is taking shape,” Birn said. “Yet, ironically the call on Canadian heavy sour crude oil—the principal export from the Canadian oilsands—has never been greater as the rapid deterioration of Venezuelan output tightens the supply of heavy sour crude globally.”
IHS Markit not only expects the growth profile for oilsands to be different in the coming decade but the drivers of growth will also be fundamentally different. Future growth will mostly come from existing projects and facilities as opposed to new projects, according to the forecast.
The 10-year forecast expects two-fifths of the anticipated rise in oilsands production to 2030 will come from ramp-up of projects in construction or recently completed. Nearly one-quarter of the growth will come from projects that are on hold but where some construction or site clearing has already begun and debottlenecking of existing operations. Less than one-third of anticipated growth is expected to come from “new projects,” IHS Markit says.
The shift towards more modest y/y gains had been expected to occur earlier, with IHS Markit anticipating that 2019 would be the pivot point. However, the decision by the Government of Alberta to artificially reduce output via a curtailment policy has deferred some of the anticipated production gains that would have occurred in 2019 to 2020.
Despite the forecast for slower rates of growth, there is still upside potential in the coming decade for the Canadian oilsands, Birn said.
“The key to unlocking further upside growth potential in the Canadian oilsands will be the ability of the government and industry to restore confidence that the crude oil produced in western Canada can get to markets at a reasonable transportation cost,” he said.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/06062019/ihs-markit-makes-10-year-forecast-for-canadian-oilsands-production/
You might also like
This acquisition adds to HEYCO’s expanding European portfolio, following the purchase of a gas field in Northern Spain and the establishment of a Madrid office in 2022.