(Photo: A packed Shell Place ballroom hears some long-needed good news about the future of the oil patch on October 6, 2015. Bradley Karp / REPORTER)
[audio:https://www.mymcmurray.com/wp-content/blogs.dir/sites/11/2015/10/yager.mp3]RAW AUDIO: MNP National Leader of Oilfield Services David Yager holds court at a press scrum following his speech at the economic information session.
A packed Shell Place Ballroom saw Dawn Desjardins, Assistant Chief Economist RBC, and David Yager, National Leader, Oilfield Services with MNP give an economic information session this morning.
The pair discussed the low crude price environment with an eye to the future, and the discussion was mostly positive.
Desjardins noted that the RBC is predicting the Canadian economy will grow in 2016 and that oil prices will jump from an average of $57 U.S. per barrel in 2016 to $65 U.S. per barrel in 2017.
She also expects the Bank of Canada to continue to spur on growth by keeping the policy rate at 0.5 per cent into most of 2016.
Yager, an eccentric supporter of the oil sands touched on a wide range of topics including proclaiming that the worst of the oil downturn was behind us.
“With a transaction the size of Suncor’s offer for Canadian Oil Sands [Ltd.] it looks like the bottom, that offer doesn’t make sense at $20 [U.S. per barrel], we keep reading in the papers that we could see oil at $20 [U.S. per barrel], and the idea of stepping forward at over $6 billion with a deal like that,” said Yager. ”It’s clear that if there is 20 buck oil Suncor doesn’t think it’s going to be for long. I think that’s a signal that we’re at the bottom.”
He also doesn’t think Suncor’s buyout attempt of COS will be the only major purchase play in the oilsands noting that MEG Energy’s stock shot up yesterday as well.
The MNP employee said the current pain is partially self-inflicted for the oil sands as production jump to a massive rate and is expected to grow over three million barrels daily in the next few years. An over-supply caused mostly by the oil sands and shale projects in the U.S. caused the current price drop.
“In the end it has been a cyclical business and people seem to forget that, we tend to take what happened yesterday and assume it will happen forever, so when things are good you assume they’ll always be good. Now that we’re at the bottom and things are bad we assume that they’ll be this way forever, and the only thing you know for sure is it isn’t going to be what most people think it’s going to be.”
Yager expects oil sands production to grow by 33 per cent between last year and 2018 to just over 3 million barrels daily, a jump of 756,000 bbl/d.
The session was hosted by the Municipality and Wood Buffalo Economic Development.
