Demand for Canadian natural gas will require aggressive drilling programs for the next 15 years, Canada's National Energy Board predicts.
NEB, in a supply/demand study covering 1993-2010, also said Canadian light crude oil production has not declined as forecast in previous reports.
The study says gas supply and demand is in balance, and operators will have to increase drilling programs to meet projected demand. That includes exports, which supply about 11% of U.S. needs.
Operators have found about 3.5 tcf/year since 1987, but the board said that is 1 tcf less than the volume needed to keep reserves from declining. It forecast that Canadian gas production will increase from a current 4.5 tcf/year to more than 6 tcf/year by 2005.
On the price side, it said prices will rise to about $4/Mcf by 2010, or $2.50/Mcf after adjustment for inflation. Current price is about $1.80/Mcf, but prices have averaged $2.04 this year at a major facility, the Alberta Energy AECO-C gas storage center.
An NEB forecast a decade ago said production of 1 million b/d in 1984 would fall to 471,000 b/d in 1993. Instead, it has remained about 880,000 b/d, largely because of new technology. The current study preducts light crude production will increase in 1995, then gradually fall to 849,000-880,000 b/d until 2016.
NEB expects oil prices of $15-30 (U.S.)/bbl during the forecast period.
The board's supply/demand study takes technical advances such as horizontal drilling and 3D seismic data into account in its forecast for the first time.
RESERVES
Meantime, a reserves report by the Canadian Association of Petroleum Producers (CAPP) said companies are increasing oil and gas discovery levels but are still falling behind production.
Alberta oil producers had a crude oil replacement rate of 68% in 1993, up from only 28% in 1992. Production was 108 million bbl greater than replacements in 1993.
In Saskatchewan, producers had a reserves replacement rate of 180%, with 165 million bbl more crude found than produced. CAPP attributed the higher finding rate to increased horizontal drilling.
CAPP said Canadian conventional crude reserves declined to 3.84 billion bbl in 1993 with a replacement rate of 89%, the highest since 1987.
Natural gas reserves declined by only 1.7% to 68.6 tcf with a replacement rate of 77%. The rate was 67% in 1992.
Synthetic crude oil reserves fell 4.6% to 1.84 billion bbl in 1993, while liquids reserves fell 3.1% to 1.31 billion bbl.
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