Oilpatch sharply cuts future production forecast
Industry still suffering from low commodity prices
The organization representing Canada's oil industry is lowering its expectations for how much crude the country will produce in the future.
The Calgary-based Canadian Association of Petroleum Producers (CAPP) said in its annual forecast Tuesday it now expects production to rise to 5.3 million barrels per day by 2030. That's a drop of 1.1 million barrels from the agency's previous prediction, representing a 17 per cent cut.
Canada produced 3.7 million barrels per day in 2014.
"Probably the biggest change we have seen in our forecast since we've been doing it, but it is also the biggest change in world oil pricing that we've seen," said Greg Stringham, vice president with CAPP.
The change in the agency's forecast was expected by some industry analysts who anticipate relatively low oil prices for several years to come.
"I'm more concerned about what's going to happen in the next few years," said Dirk Lever, with Altacorp Capital in Calgary.
"When we were at $100 US oil, production around the globe started to increase to the point supply exceed demand, so we are going to see low oil prices for some time until we see a re-balancing."
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 agency predominantly expects growth in the oilsands of northern Alberta. By 2030, production of oilsands bitumen is expected to be four million barrels per day, Western Canada conventional oil to be 1.3 million barrels per day and Eastern Canadian offshore production to be 91,000 barrels per day.
The industry is currently struggling with low oil prices after they collapsed last year. CAPP said oil producers are evaluating their growth plans, especially oilsands operators.
The agency consulted with refineries in the United States to gauge the future demand for Canadian oil. CAPP said refineries will still have demand for Canada's heavy oil, since supply from Mexico and Venezuela is declining.