Canadian oil production is expected to reach 6.2 million barrels per day by 2030 as the country continues to see increased exploration and development activity from the oil and gas industry. This projection is contained in a report issued by the Canadian Association of Petroleum Producers (CAPP), an industry group that represents oil and gas operators active in Canada.
Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.
Canadian oil production totaled 3 million barrels per day in 2011, with 1.6 million barrels, or 53% coming from various oil sands projects. CAAP projects that production growth will escalate fairly quickly, reaching 4.7 million barrels in 2020 and 6.2 million barrels per day in 2030.
The bulk of this growth will come from the continued development of the oil sands deposits in Alberta, where dozens of companies have set up operations. The CAAP report estimates that oil sands production will be 3.2 million barrels per day in 2020, and 5 million barrels per day in 2030. This rate of growth would increase oil sands production to 81% of total Canadian production by that time.
(Millions of barrels per day)
Canada is well situated to supply this future oil production to users in the United States, which is the world's largest consumer, and continues to import large amounts of oil from other countries that are politically unstable. The oil will be supplied to consumers in Eastern Canada, which also imports oil from overseas.
SEE: Canada's Commodity Currency: Oil And The Loonie
Oil Sands Producers
The Athabasca Oil Sands Project (AOSP) is 60% owned by Royal Dutch Shell (NYSE:RDS.A, RDS.B) and has current capacity of 155,000 barrels per day. The project started production in 2003 and Royal Dutch Shell is building a 100,000 barrel per day expansion at AOSP. Chevron Corporation (NYSE:CVX) and Marathon Oil (NYSE:MRO) each own 20% of this project.
Several Canadian based oil and gas operators also have oil sands operations. Suncor (NYSE:SU) reported average daily production of 346,000 barrels of oil per day in May 2012 from its oil sands operations. The company plans to grow production at about an 8% annual rate and reach oil sands production of one million barrels of oil equivalent per day by 2020.
Nexen (NYSE:NXY) owns 65% of the Long Lake Project in Alberta and has a gross capacity of roughly 60,000 barrels of oil per day at this project. The company is working towards increasing production at Long Lake and recently made operational and regulatory progress here. Nexen's partner at Long Lake is CNOOC Ltd. (NYSE:CEO), which owns 35% of the project.
SEE: Oil And Gas Industry Primer
The Bottom Line
Canadian oil production is expected to more than double by 2030, as the huge oil sands resource base in Western Canada yields its riches. The U.S. and other consumers should appreciate this new supply from our politically stable neighbor.
At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.
Stock AnalysisIf you're seeking modest appreciation, generous dividend payments and resiliency, consider these eight utility stocks.
Stock AnalysisHere's why Phillips 66 will likely remain one of the world’s largest and most profitable companies for a long time to come.
Mutual Funds & ETFsExplore detailed analysis of the top three equity energy mutual funds, and learn about the characteristics and suitability of these funds.
Stock AnalysisLearn about some possible risks for Chipotle, one of America's most popular and fastest-growing food chains and leader of the "casual dining" experience.
Stock AnalysisStuck on oil? Take a look at these six stocks—three that present risk vs. three that offer some resiliency.
EconomicsEmerging markets have been hammered lately, but these three countries (and their large and young populations) are worth monitoring.
Stock AnalysisPepsiCo has long been known as one of the most resilient stocks throughout the broader market. Is this still the case today?
Investing BasicsTrading spot gold or gold futures, equities and options isn’t hard to learn, but the activity requires skill sets unique to these markets.
EconomicsExplore the historical relationship between interest rate increases and the price of gold, and consider what effect a fed funds rate hike might have on gold.
InvestingHow do bond exchange traded fund (ETF) distributions work? It’s a question I get a lot. First, let’s explain what we mean by distributions.
When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>