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CANADIAN CRUDE OIL AND NATURAL GAS PRODUCTION AND SUPPLY COSTS OUTLOOK (2016-2036)

Canadian Crude Oil and Natural Gas Production and Supply Costs Outlook (2016-2036)

Study Released September 23, 2016

Study No. 159

In a low cost environment for both oil and natural gas, the future of Canada’s conventional oil and gas development is being questioned. The last two years have seen significant declines in drilling and production as Canadian supply costs are high relative to the commodity prices. CERI’s “Canadian Crude Oil and Natural Gas Production and Supply Costs Outlook (2016 – 2036)” breaks down drilling and production forecasts as well as supply costs across the various producing regions in Canada. Total natural gas production is expected to start to rise by 2019 as the price of gas increases and drilling rates overcome well decline rates. The rise in the gas production is totally dependent on whether LNG projects will be constructed. While oil prices are expected to rise as well, conventional crude production is expected to drop slightly and remain stable throughout the study period, as growth is concentrated in the oil sands. The Western Canadian Sedimentary Basin will see the vast majority of both natural gas production and conventional crude oil production, however, offshore Newfoundland will contribute approximately one-tenth of the crude oil over the study period.

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