IHS Markit Oil Sands 10-Year Production Forecast: Total Oil Sands Production Will Be Nearly One Million Barrels Higher by 2030 Though Lower Annual Growth Rates Will Be the “New Normal”

WASHINGTON–(BUSINESS WIRE)–Canadian oil sands production is set to enter a period of slower annual
production growth compared to previous years. Nevertheless, total
production is expected to reach nearly four million barrels per day
(mbd) by 2030 – nearly one million more than today, according to a new
10-year production forecast by business information provider IHS
Markit
(Nasdaq: INFO).

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

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,
said Kevin
Birn
, vice president, IHS Markit – who heads the Oil Sands Dialogue.

“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,” Birn said. “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.”

A fuller analysis of the new IHS Markit oil sands production forecast,
authored by Kevin Birn is available at the IHS
Markit energy blog
.

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, according to the
forecast.

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 debottlenecking of existing
operations. Less than one-third of anticipated growth is expected to
come from “new projects,” IHS Markit says.

The shift towards more modest year-on-year gains had been expected to
occur earlier, with IHS Markit anticipating that 2019 would be the pivot
point. However, the decision by the Government of Alberta to
artificially reduce output via a curtailment policy has deferred some of
the anticipated production gains that would have occurred in 2019 to
2020.

Despite the forecast for slower rates of growth, there is still upside
potential in the coming decade for the Canadian oil sands, Birn said.

“The key to unlocking further upside growth potential in the Canadian
oil sands will be the ability of the government and industry to restore
confidence that the crude oil produced in western Canada can get to
markets at a reasonable transportation cost,” he said.

Previous Oil Sands Dialogue research is available to download at www.ihsmarkit.com/oilsandsdialogue.

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information,
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government, improving their operational efficiency and providing deep
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of the Fortune Global 500 and the world’s leading financial institutions.

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News Media:
Jeff Marn
IHS Markit
+1 202 463 8213
[email protected]

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