Report: Canadian oil sand production will continue to grow backed by key projects

The Canadian oil sand industry is predicted to continue to grow with a number of planned projects expected to commence production, says a report by GlobalData.

Titled ‘Production and Capital Expenditure Outlook for Key Planned Upstream Projects for Canadian Oil Sands‘, the report details that expansion phases of the ongoing projects will account for the maximum share in the planned projects from 2016 to 2025. Out of the 17 planned projects analysed in the report, 11 are expansions and the remaining are new projects.

With five planned projects, including Narrows Lake, Foster Creek Phase G, Foster Creek Phase H, Christina Lake Phase F and Christina Lake Phase G, Cenovus Energy will be at the top in terms of operatorship of planned oil sands projects. It will be followed by Canadian Natural Resources, Husky Energy, Pengrowth Energy Corporation and Suncor Energy, with two projects each.

The expenditure associated with key planned oil sands projects is estimated to be worth $82.8bn, with $40.6bn projected to be spent between 2016 and 2025. The report estimates that production from the key oil sands project will be 686,000 barrels of oil per day (bpd) in 2025 with Canadian Natural Resources expected to lead due to its Horizon mining project.

Other factors such as size of the resource, Alberta’s developed oil sands industry and a demand for heavy crude oil from US refining sector are also expected to contribute to the growth of the oil sands industry. The growth will, however, be slow due to the existing uncertainty in the oil market, adds the report.

The GlobalData report further elaborates on how the volatile global oil prices have impacted the Canadian oil sands industry with multiple projects being delayed or shelved. Several projects have also been placed ‘on hold’. Two notable projects, Kearl Phase 3 and Kearl Phase 4 Debottleneck are expected to start in 2016 and 2017 respectively.