- The IEA expects Canadian oil sands production to grow by 8% y-o-y (180,000 b/d) in 2014
- Canadian bitumen producers hope to expand their oil sands output to 5.2 million b/d by 2030 at 9% y-o-y, more than double current production
- We consider this to be very optimistic, and forecast 2030 production between 2.3 and 4 million b/d, depending on prevailing WTI prices
- Even at $110+/bbl, our bitumen production forecast is 1 million b/d less than CAPP’s projection for 2030
- Projects currently producing are unlikely to be shut-in due to sunk costs
- Despite refining difficulties and weak prices, most existing and under construction oil sand operations remain marginally profitable with WTI below US$70/bbl
- But pipeline bottlenecks, labour shortages and rising costs of borrowing spell trouble, especially for smaller operators and start-ups
- Persistently weak oil prices will slow production growth
- Canada must focus on improving access to markets to support WCS prices
by Alexander Wilk // 26 November, 2014
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