Canadian Oil Companies Cut Investment, Slash Production Forecast
Canadian oil companies will cut investment by one-third this year, to $46 billion, and increase production more modestly due to falling oil prices, the Canadian Association of Petroleum Producers forecast this week.
Investment in tar sands/oil sands will fall 25%, from $33 billion in 2014 to $25 billion in 2015.
Like this story? Subscribe to The Energy Mix and never miss an edition of our free e-digest.
The association expects western Canadian production to increase by 150,000 barrels per day (b/d) in 2015 and 2016, compared to earlier forecasts of 215,000 b/d in 2015 and 350,000 in 2016, McCarthy and Lewis report.
“The reason we’re seeing an increase each year is that we’ve had such good investment in the last four or five years,” CAPP President Tim McMillan told the Globe and Mail. “Much of the oil sands that is coming on stream are projects that were invested in over the last four or five years.”
The scaled-back forecast reflects CAPP members’ “real concern” about the health of the industry, McMillan told the Calgary Herald. “As this industry looks to position itself and get its costs in a long-term sustainable position, it will have real effects, not just in Calgary or in the field in Alberta and Saskatchewan, but across Canada,” he said.
“It’s something I don’t think you can get used to because it has real effects on the families in our communities. No one takes that lightly.”
But “layoff notices are already being written,” the Herald reports, with three companies—Suncor Energy, Baker Hughes Inc., and Schlumberger Ltd.—cutting 17,000 positions in Canada and worldwide.