Canada, Brazil lead oil output growth in Americas

By Jeffrey Jones - Analysis

CALGARY, Alberta (Reuters) - Booming investment in Canada's oil sands and rising Brazilian crude production should more than make up for declines elsewhere in the Americas -- good news for the United States as it tries to reduce its reliance on Middle East imports, a Reuters survey showed.

The gains from northern Alberta's vast tar-like oil deposits and a string of discoveries off Brazil's coast point to shifting oil clout among Western Hemisphere countries more friendly to the United States, the world's top consumer.

"What we have been seeing is relatively flat or falling supplies from Mexico and Venezuela," said Greg Stringham, vice-president of the Canadian Association of Petroleum Producers.

"It really does open an opportunity for what I call secure, reliable supplies of oil from Canada into those markets."

Oil production in the Americas is set to rise by a net 150,000 barrels a day, or 0.7 percent, to 21.57 million bpd in 2008 -- equal to about a quarter of total estimated global output, according to Reuters calculations based on a survey of governments, investment banks and consultants.

Click here for a table showing the results of the survey:

ID:N08381815.

Canadian output is on track to rise by nearly 7 percent to around 3 million barrels a day, excluding gas liquids from processing plants and refineries, said Martin King, analyst at FirstEnergy Capital Corp.

"The gain that we're projecting there is virtually all oil sands-related," King said.

Two major oil sands projects, Nexen Inc's (NXY.TO) $6.1 billion Long Lake venture and Canadian Natural Resources Ltd's (CNQ.TO) $7.8 billion Horizon development, are slated to start up this year. Several smaller ones are also set to begin.

The overall value of planned oil sands projects and those under development is pegged at more than $100 billion, with nearly every oil major weathering surging costs to tap the largest oil source outside the Middle East.

BRAZIL GROWTH

Brazil could produce 2.32 million barrels a day, up 13 percent from 2007, including output of ethanol. Three new platforms are slated to start up, including Marlim Leste and Marlim Sul, each with a 180,000-barrel-a-day capacity.

State-run Petrobras also expects to begin a production test at the giant Tupi oil and gas field, where it has estimated reserves as high as 8 billion barrels.

U.S. output is expected to rise slightly as large Gulf of Mexico projects start up, making up for onshore declines.