Oilpatch lowers expectations for future growth
CAPP drops its growth estimate for 2030 by 400,000 barrels per day compared to previous forecast
Canada's oil industry is cutting its growth forecast for the third straight year amid a downturn in the industry and uncertainty about future pipeline growth.
Oil production is expected to grow, but not by as much as previously estimated, says the Canadian Association of Petroleum Producers (CAPP) in its 2016 forecast released on Thursday.
- Oilpatch slashes employee perks as 'entitlement mentality' becomes unaffordable
- Oilsands growth in doubt and could affect national GDP
The organization dropped its growth forecast for 2030 by 400,000 barrels per day compared to last year's forecast
CAPP points to the need for new pipelines so that oil companies can improve their access to export markets and receive a higher price for their crude oil.
"We have to get that product to market," said McMillan.
CAPP bases its forecast on what it hears from its member companies in the oil industry using a survey about each company's expected production.
The growth forecast for both oilsands projects and conventional oil is reduced in the latest report.
By 2030, the oilsands are expected to produce 3.7 million barrels per day, down from last year's forecast of four million barrels of oil per day. Currently, the oilsands supply about 2.2 million barrels per day.
"The timing for the startup of oilsands projects in the future have been deferred in consideration of the weaker oil price environment and uncertainty around the timing of recovery," states the report. "Conventional production is fairly sensitive to oil prices so production could return more quickly if prices rebound strongly."
The oil forecast for 2030 has been cut in three consecutive years. In 2014, CAPP lowered its outlook by 300,000 barrels a day, by an additional 1.1 million barrels in 2015, and a further 400,000 barrels in this year's report.