Canada’s major oil sands producers are boosting crude production even if they aren’t starting up new projects. The secret sauce appears to be reducing maintenance times and extending maintenance cycles to squeeze more oil and raise efficiencies, Bloomberg reports.
Suncor Energy, for example, completed ahead of schedule a multi-year effort to replace eight coke drums at its Base Plant, extending the life of the facility’s Upgrader 1 by about 30 years.
“Everything went flawlessly, resulting in the project being completed safely, coming in ahead of schedule and below budget,” Peter Zebedee, Executive Vice President – Oil Sands, said earlier this month.
Two other major producers, Canadian Natural Resources and Imperial Oil, as well as other oil sands firms, have extended the cycle for maintenance to two years from one year. This has raised efficiencies and production while higher production has been offsetting the downward pressure on profits that comes with the decline in oil prices, Bloomberg’s Robert Tuttle notes.
“We have seen their facilities run harder and longer and the volumes are going up from existing infrastructure,” Kevin Birn, chief analyst for Canadian oil markets for S&P Global, told Bloomberg.
“They are finding ways to get more out of what they have,” the analyst added.
Despite lower oil prices, Canada’s oil sands production is expected to reach an annual all-time high of 3.5 million barrels per day (bpd) this year, thanks to optimization and efficiency at producing assets, S&P Global Commodity Insights said in June in its latest outlook.
Output from Canada’s oil sands will continue to rise beyond this year, according to S&P Global Commodity Insights’ 10-year production outlook.
This year, production is set for a record annual average of 3.5 million bpd, up by 5% compared to the 2024 output, while oil sands volumes are expected to top 3.9 million bpd by 2030, per S&P Global Commodity Insights. The projection for 2030 is 500,000 bpd higher compared to the 2024 production level and is 100,000 bpd – or almost 3% — higher compared to the previous 10-year outlook.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com
- Chinese Refiners Deepen Losses As Overcapacity Weighs on Margins
- Centrica Buys UK’s Biggest LNG Import Terminal for $2 Billion
- Oil Price Structure Flashes Fears of Oversupply
