OIL PRICES COLLAPSE
The collapse in crude prices will pinch Canada's long-term oil output growth by more than a million barrels a day, highlighting the lasting impact of energy companies' capital spending cuts, said an industry group in the world's fifth-largest producer.
The Canadian Association of Petroleum Producers estimates Canada will produce 5.3m b/d by 2030, down from a forecast of 6.4m b/d published a year ago, due to the "sharp drop in world oil prices over the past year".
The downgrade underscores how Canada's oil industry has reacted differently than the US in the face of oil prices 40 per cent lower than a year ago. Together, the two countries will be a bulwark of oil supply growth as global demand surpasses 100m b/d in the next decade.
Shale drillers in the US are more nimble in the face of oil price moves. The idling of hundreds of drilling rigs points to a decline in US production later this year.
In Canada, most production gains are coming from the Alberta oil sands, an expanse of tar-like bitumen that requires great upfront investment and pays back over decades. Once built, oil sands projects tend to run at full capacity.
Capp, based in Calgary, estimated Canadian oil production would rise by 151,000 b/d to 3.893m b/d in 2015, and top 4m b/d in 2016, a similar forecast to last year's.
Companies such as ExxonMobil-controlled Imperial Oil are completing projects begun years ago. This year, Imperial will double production capacity at its Kearl oil sands project to 220,000 b/d.
"The existing operations are very competitive, even under low oil price cycles," said Ryan Kubik, chief executive of Canadian Oil Sands, the largest shareholder in the Syncrude oil venture in Alberta. "Where you see the impact is more on future investments."
Oil sands producers have however deferred or cancelled billions of dollars worth of capital spending on new projects, delaying new supplies planned for late in the decade. Royal Dutch Shell, for example, withdrew its application to build a 200,000 b/d oil sands mine at Pierre River, Alberta.
"We're not investing in significant expansion in oil sands mining at this point in time," said Marvin Odum, Shell's head of exploration and production in the Americas.
Capp estimated total oil and natural gas industry capital spending at C$45bn (US$37bn) in 2015, down nearly 40 per cent from 2014. Oil sands capital spending will be 30 per cent lower at C$23bn.
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REUTERS - India’s natural gas consumption is expected to rise to 70 billion cubic metres (bcm) by 2022 and 100 bcm by 2030, according to a government think tank and the Oxford Institute of Energy Studies, up from 50 bcm now. India burns just 7 percent of what top user the United States consumes in a year with about a quarter of India’s population.
Norway, which relies on oil and gas for about a fifth of economic output, would be less vulnerable to declining crude prices without its fund investing in the industry, the central bank said Thursday. The divestment would mark the second major step in scrubbing the world’s biggest wealth fund of climate risk, after it sold most of its coal stocks.
WSJ - Light, sweet crude for December delivery rose $1.41, or 2.6%, to $56.55 a barrel on the New York Mercantile Exchange, snapping a three-session losing streak. Brent, the global benchmark, advanced $1.36, or 2.2%, to $62.72 a barrel.
U.S. Rig Count is up 327 rigs from last year's count of 588, with oil rigs up 267, gas rigs up 61, and miscellaneous rigs down 1 to 1. Canada Rig Count is up 24 rigs from last year's count of 184, with oil rigs up 9 and gas rigs up 15.