* Overall output 4.7 mln bpd by 2020, from 3 mln
* Oil sands production 3.1 mln bpd, from 1.6 mln
* W.Canadian conventional 1.3 mln from 1.1 mln
By Jeffrey Jones
CALGARY, Alberta, June 5 Canadian oil output is
poised to surge ahead far faster than expected only a year ago,
the industry's main lobby group said on Tu esday, boosting its
forecast for 2020 production by half a million barrels a day.
Total output from the United States' top energy supplier is
now expected to jump by 57 percent to 4.7 million barrels per
day by the end of the decade due to a new boom in light oil from
shale and other tight rock formations and from
multibillion-dollar investments in oil sands projects, the
Canadian Association of Petroleum Producers said in its closely
watched annual outlook.
A year ago it said output would hit 4.2 million bpd.
Light crude from the Bakken region of Saskatchewan and
similar formations in Alberta, coaxed to the surface with the
aid of horizontal drilling and hydraulic rock fracturing,
represents a surprisingly large part of the new projected gain,
CAPP vice-president Greg Stringham said.
Light oil output had been waning steadily for more than a
decade as fields matured and the Alberta oil sands played an
increasingly dominant role in Canadian energy production.
CAPP now sees conventional light and heavy crude climbing to
1.3 million bpd in eight years from 1.1 million in 2011.
"We saw a little resurgence starting last year and it was so
early we didn't want to go overboard, but that resurgence has
continued and is much stronger this year. It's making up almost
half of the growth we're seeing in 2020-2025," Stringham said.
Down the road, overall Canadian production is projected to
increase to 5.6 million bpd by 2025 and 6.2 million by 2030.
Projected increases in the next few years have heightened
the urgency for boosting pipeline capacity to export markets, he
said. Ottawa seeks to streamline the regulatory process for
advancing such projects through a controversial series of
measures contained in a sweeping budget bill.
Without new or expanded lines, production could now bump up
against available export capacity by as early as 2014-2015, CAPP
said. That moves up the expectation by one to two years.
In the oil sands, the world's third-largest crude deposit,
production could double to 3.1 million bpd by 2020, CAPP said --
about the same as current oil output from Iran, OPEC's No. 2
Some analysts have warned that a six-week, $20 slide that
has cut U.S. benchmark crude oil to $84 a barrel, coupled with
deepening discounts on Canadian oil due to tight pipeline
capacity, could prompt some developers to defer projects.
On Monday, Wood Mackenzie released a report saying pure-play
oil sands developers without hedges in place are most likely to
cancel or delay project plans.
However, CAPP is not basing its outlook on the day-to-day
gyrations in the oil market, Stringham said.
"In particular, when it comes to the oil sands, these are
five- to seven-year construction periods and approval periods
for projects, so while it is important as a signal it really
won't change it unless it goes to levels much lower than this
and stays there for a long period," he said.
CAPP said most production growth will go toward displacing
imported crude supplies in Eastern Canada, reaching the U.S.
Gulf Coast and getting shipped to Asian markets.
Several pipeline projects, including Enbridge's Inc's
Line 9 reversal, TransCanada Corp's Keystone
XL and Enbridge's Northern Gateway, are designed to get Canadian
crude to those locations, though all face opposition from
"Timely regulatory decisions on new upstream development and
infrastructure projects will enhance Canada's international
competitiveness in attracting the investment needed to support
this production growth and realize market opportunities,
benefiting all Canadians," CAPP said in a statement.