Canada’s oil sands production has now fully recovered, according to IHS Markit, and more.
The pandemic, however, has clouded the outlook for the oil sands.
Canadian oil sands production is expected to reach 3.6 million barrels per day in 2030, according to the latest forecast from IHS Markit. This would represent an increase of 650,000 b / d from 2021 levels and 900,000 b / d from 2020 levels.
This is lower than IHS Markit’s previous forecast of 3.8 million bpd due to the lingering effects of the pandemic and the country’s pipeline problems.
But things are improving. The Canadian benchmark, Western Candian Select (WCS), has gone from less than $ 31 a barrel a year ago to over $ 58 a barrel today.
“Although oil prices have rebounded and even exceeded pre-pandemic levels, producers are prioritizing rebuilding their balance sheets, paying down debt and returning money to shareholders,” said Kevin Birn, vice president and head of the Canadian oil market at IHS Market, adding that “These trends, which will delay an increase in upstream spending in the oil sands, have been factored into the reduction in long-term growth forecasts. from IHS Markit. “
The uncertainties surrounding the energy transition are also factored into the outlook for Canada’s oil sands. Oil sands balancing costs have come down, but new oil sands projects come with longer lead times than US shale projects. Combined with higher spending on tar sands projects, the energy transition could help curb new projects more than the US shale.
For this reason, according to IHS Markit, the focus will be on expanding and improving existing projects instead of investing money in new ones.
By Julianne Geiger for OilUSD
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