Canada Oil Sands Output Fully Recovers from Covid
Canadian oil sands production has fully recovered from last year’s Covid-19 shock, according to IHS Markit.
The company, which highlighted that this shock saw the largest contraction of upstream production in Canadian history, said the production has exceeded pre-pandemic levels, but warned that lingering Covid impacts, pipeline constraints, and uncertainties related to an accelerating energy transition have reduced the long term growth projection for oil sands.
The latest forecast by the IHS Markit Oil Sands Dialogue expects Canadian oil sands production to hit 3.6 million barrels per day (MMbpd) in 2030, which marks an increase of 650,000 barrels per day compared to 2021 levels. The previous IHS Markit forecast expected production to reach 3.8 MMbpd in 2030.
“Canadian oil sands production recovered rapidly to exceed pre-pandemic levels by the end of 2020 and the outlook for longer term growth remains substantial,” Kevin Birn, the vice president and head of Canadian oil market at IHS Markit, said in a company statement.
“Nevertheless, lingering impacts from the Covid-19 shock, delays to critical transportation infrastructure, and rising energy transition pressures have trimmed that growth outlook from previous estimates,” he added.
“Although oil prices have rebounded and even exceeded pre-pandemic levels, producers are prioritizing rebuilding their balance sheets, paying down debt and returning cash to shareholders … These trends, which will delay a rise in upstream spending in the oil sands, factored into the reduction in the IHS Markit long term growth expectation,” Birn went on to say.
As of June 24, there have been more than 1.4 million confirmed cases of Covid-19 in Canada, with 26,155 deaths, according to the latest information from the World Health Organization (WHO). As of June 18, a total of 30.8 million vaccine doses have been administered in the country, WHO data shows.
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