Oil sands, Newfoundland underpin growth

Canadian crude oil volumes are expected to grow by 9 percent this year, reflecting a mixed bag of shrinking conventional output in Western Canada, offset by the anticipated gains from Alberta’s oil sands and Newfoundland’s offshore.

In issuing the forecast, the National Energy Board estimated production for the year at 2.86 million barrels per day, a gain of about 240,000 bpd from 2006, which in turn was up 5.5 percent from the 2005 tally of 2.48 million bpd.

A major benchmark occurred in November last year when exports to the United States topped the 2 million bpd mark for the first time.

The federal regulator is projecting a continued rise from the oil sands, which are expected to add more than 8 percent to average 1.77 million bpd, while the return to higher numbers at the Hibernia and Terra Nova fields will boost offshore Newfoundland by 11 percent to 392,395 bpd.

The oil sands will account for the largest chunk of the increase, adding almost 185,000, with non-upgraded bitumen rising 114,748 bpd to 583,083 bpd and upgraded bitumen growing by almost 70,000 bpd to 716,274 bpd. Light crude (including upgraded bitumen and condensates) will contribute an extra 141,166 bpd and heavy output will rise by 95,577 bpd. But conventional heavy crude will post declines of 15,190 bpd to 183,813 bpd in Alberta and 3,415 bpd to 332,219 bpd in Saskatchewan.

Conventional light crude will continue its steady descent in Alberta, slipping 20,084 bpd to 337,930 bpd, but Saskatchewan will add 2,176 bpd to top 97,000 bpd as activity steps up in the province’s southeastern Bakken play.

The two oldest Newfoundland fields are predicted to help the Eastern Canadian offshore rebound this year by 11 percent to 392,395 bpd.

—Gary Park