Oil sands production to near four million barrels a day by 2030

IHS Markit report projects slower pace of investment and growth in Canadian projects

Mario ToneguzziCanadian oil sands productions is expected to reach nearly four million barrels a day by 2030, or almost one million barrels more than today, according to a new 10-year production forecast by IHS Markit.

But the business information provider also says production is set to enter a period of slower annual growth.

“Large-scale oil sands 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 oil sands is taking shape,” said Kevin Birn, vice-president of IHS Markit, who heads the oil sands dialogue.

“Yet, ironically the call on Canadian heavy sour crude oil – the principal export from the Canadian oil sands – has never been greater as the rapid deterioration of Venezuelan output tightens the supply of heavy sour crude globally.”

IHS Markit said it expects average year-on-year supply additions to be below 100,000 barrels per day in the coming decade. By contrast, growth over the current decade regularly averaged additions in excess of 150,000 barrels per day, it added.

Birn said 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.

“IHS Markit not only expects the growth profile for oil sands 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,” said the report.

“The 10-year forecast expects two-fifths of the anticipated rise in oil sands 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 de-bottlenecking of existing operations. Less than one-third of anticipated growth is expected to come from ‘new projects’.”

– Mario Toneguzzi for Calgary’s Business

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