Analyst from IHS Energy say Canadian oil production will grow 42 percent over the next nine years with the majority from existing facilities and their expansions. Jeff Marn, spokesman of IHS says this is less than previously estimated before the economic oil disaster.
They report low prices effecting producers by halting sanctions on new plants, and all projects to be completed within two years. Future growth will come from “brownfield” expansions, where construction activity is reduced to lower costs, improving efficiencies and natural gas prices.
Director Kevin Birn said, “We expect oil sands producers to focus future investments in the coming years onto their most economic projects – which we expect to be expansions of existing facilities. Expansions of existing facilities are better understood, quicker to first oil and lower cost to construct.”
IHS reports to build and operate new plants have cheapened by $10 a barrel, and the cheaper projects will possibly break even, trading at just below $50 a barrel. U.S. crude closed out the second quarter with a spark of hope.
Article written by HEI contributor Marcela Abarca.