Crude slump projected to take ever greater toll on production
Canada’s output growth to slow to 17,000 barrels a day by 2016: CERI
CALGARY — Canada’s crude output growth will slow to 17,000 barrels a day by next year after oil lost half its value, according to the Canadian Energy Research Institute.
Growth in production will slow from 41,000 barrels a day this year amid declining conventional oil output, CERI president emeritus Peter Howard said in a presentation at a conference in Calgary Tuesday. The slowdown delays by two years Canada’s need for one of four major oil export pipelines planned, Howard said.
Oil fell to a six-year low near $42 US a barrel in March from last year’s high of about $108 in June as the Organization of Petroleum Exporting Countries refrained from reducing production amid a shale boom in the U.S. The drop prompted conventional drillers to cut output, with Canadian rigs seeking oil falling to 18 last month, from more than 400 in February 2014, according to data from Baker Hughes Inc.
“We are not going to be in trouble until 2018,” Howard said in an interview at a conference in Calgary.
“We will need a pipeline post 2018 for sure.”
Four pipe projects, including Trans Canada Corp.’s Energy East and Keystone XL pipelines as well as two lines that would transport oil to the west coast, are tied up in legal or regulatory delays. Canadian oil producers have sought to increase their access to markets in the U.S. and abroad to earn higher returns on their crude, which trades at a discount to the U.S. benchmark West Texas Intermediate.
Production from the world’s fifth-biggest crude producer will expand by 126,000 barrels a day in 2017 and accelerate to 167,000 barrels a day in 2018, according to Howard.