The Canadian Association of Petroleum Producers (CAPP) has cut its forecast for the country’s future oil and gas production by about 17% compared to 2014, and is predicting 40% less oil and gas investment over the next year than it previously expected.
CAPP now expects the industry to produce 5.3 million barrels of oil per day by 2030, 1.1 million barrels below its previous projection. Investment will be limited to $23 billion, “with growth rates falling by roughly half in the next decade,” the Globe and Mail reports.
“I think maybe they’re getting more realistic,” private equity executive Jackie Forrest told the Globe. “With the lower price environment, less capital available to oil sands, and competition from other investments like tight oil, I think it’s realistic that you assume some of those projects don’t move forward.”
“The numbers reflect an abrupt shift under way in northern Alberta after years of torrid growth, highlighting the shaky prospects for an industry struggling to cope with lower commodity prices, competition from U.S. shale supplies, and the threat of new costs imposed in the form of higher carbon levies,” Lewis writes. “Oil’s skid from more than US$100 a barrel last summer to today’s level of about US$60 has triggered waves of budget cuts and layoffs across the energy sector. The downturn has also accelerated a cost purge in the oil sands, as companies scramble to reverse years of runaway inflation.”
In the United States, meanwhile, the weekly count of operating oil and gas rigs fell to 868, the lowest count since January 24, 2003, from 1,860 a year ago, Business Insider reports.