The Canadian Association of Petroleum Producers (CAPP) revised its 2015 forecast in light of falling oil prices today.
In a short-term review of its industry forecasts, CAPP estimates a 33 per cent decline in short-term capital spending in 2015 and a projected slowdown in growth of oil production from their prior forecast by about 65,000 barrels per day (bbl/d) in 2015 and 120,000 bbl/d in 2016.
“No question, the effects on the industry are sharp but we continue to need all forms of transportation in all directions, pipelines in particular, as our industry continues to grow in the years ahead,” said CAPP President Tim McMillan.
As even in the face of tumbling oil prices the CAPP continues to push for pipelines and increased market access for its producers.
Capital investment in Western Canada, including the oilsands, will total $46 billion in 2015, down 33 per cent from the $69 billion invested in 2014.
In the oilsands, 2015 capital investment is forecast at $25 billion compared to $33 billion last year. Capital spending in the conventional oil and gas portion of the Western Canada Sedimentary Basin is forecast to decrease to $21 billion this year from the $36 billion invested in 2014.
The CAPP also forecasts a sharp drop in the number of wells to be drilled in Western Canada this year, a 30 per cent drop is expected from 2014 with 7,350 forecasted wells.
The new 2015 production forecast for Western Canada is 3.6 million bbl/d, about 150,000 bbl/d, higher than 2014 production of 3.5 million bbl/d, a similar growth rate is expected in 2016.
According to the CAPP the forecasts are developed from oil producer data and CAPP analysis of production trends, expected drilling activity, recent announcements and ongoing discussions with industry stakeholders and government agencies.
“Canada has the opportunity to be the supplier of choice at home and in the global market and that’s why market access, by all means, in all directions, is so critically important to improve health, wealth and quality of life of all Canadians, even with the current declines in prices and investment,” McMillian said.
