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Canadian oil production will increase by 23 per cent within four years, increasing pressure on outlets to markets south of the border, according to Colorado-based Bentek Energy.
Canadian crude production is expected to rise by 763,000 barrels per day by the end of 2016, the energy markets analytics firm said in a report Tuesday.
Much of the increase will be driven by oilsands projects ramping up and by conventional crude plays gaining momentum through technologies such as horizontal drilling and multi-stage fracturing, Bentek said.
The bulk of the incremental volumes will find a home in the United States, the world’s largest energy consumer.
“The burgeoning Canadian oil supply will lead to an increase of imports to the U.S.,” the report stated. “Canada currently exports around 2.2 million barrels per day to the U.S., with 64 per cent going to the (U.S. Midwest) market.”
The report was largely in line with the Canadian Association of Petroleum Producers’ most recent forecast that oil production will increase by approximately 700,000 bpd by 2015, a year earlier than the Bentek outlook.
Canada produced about 2.8 million bpd in 2010 and ranks sixth in the world for total crude oil production.
Between 2005 and 2011 oil production in Canada grew by 542,000 bpd. The rapid growth is putting pressure on export arteries to U.S. markets.
“To relieve infrastructure constraints resulting from these supply increases, several pipeline expansions and new-builds are scheduled to come online during the next five years,” Bentek noted.
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