The Canadian Association of Petroleum Producers has cut its expectations for oil-production growth and said it expects sharply lower capital spending by the oil industry in western Canada this year.
The trade group cut its forecast for oil production growth in western Canada by about 65,000 b/d, now expecting an increase over 2014 levels of 150,000 b/d to an average of 3.6 million b/d for 2015. CAPP said it expects a similar increase next year, 120,000 b/d below its earlier growth projection for 2016.
In 2015, conventional oil production will remain at 1.3 million b/d, and oil sands output will increase to 2.3 million b/d as projects come on stream from prior-year investments, CAPP said.
The group expects capital spending in western Canada to drop 33% to $46 billion this year.
The spending forecast includes a decline in the oil sands to $25 billion from $33 billion last year. In conventional oil and gas, CAPP projected, spending will drop to $21 billion from $36 billion.
CAPP predicted a 30% decline in drilling in western Canada to 7,350 total wells.
