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 on Tuesday 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.
Efficiencies, optimization, and favorable economics are expected to drive production growth at Canada’s oil sands, S&P Global Commodity Insights says.
The oil sands have relatively low breakeven costs once the massive upfront investments for bringing projects online are being made.
S&P Global Commodity Insights’ outlook still expects Canada’s oil sands production to enter a plateau later this decade, but this would be at a higher level than previously thought.
“While a lower price path in 2025 and the potential for pipeline export constraints are downside risks to this outlook, the oil sands have proven able to withstand extreme price volatility in the past,” said Celina Hwang, Director, Crude Oil Markets, S&P Global Commodity Insights.
Despite market volatility, Canada’s energy producers have maintained spending and production guidance so far this year, showing more resilience compared to some of their counterparts in the United States.
Overall, Canadian upstream companies have fared better compared to U.S. firms, which highlights the quality and longevity of the Western Canadian Sedimentary Basin (WCSB) reserves, intelligence firm Rystad Energy says.
By Charles Kennedy for Oilprice.com
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