The Canadian Association of Petroleum Producers cut its 2030 oil production forecast by 17 percent as capital expenditures slipped after crude prices tumbled.
The world’s third-biggest holder of crude reserves will produce 5.3 million barrels a day, down from 6.4 million forecast a year ago, CAPP said. The organization cut its forecast after oil dropped to $42 a barrel this year from near $108 in June as the Organization of Petroleum Exporting Countries maintained quotas amid a surge of U.S. shale oil.
The drop has curtailed capital expenditure by oil and gas producers to C$45 billion ($36.5 billion) in 2015 from C$73 billion last year, CAPP said. Expenditure in the oil sands fell to C$23 billion this year from C$33 billion.
“Companies are reverting to expansion of existing projects,” said Greg Stringham, a vice president at the Canadian Association of Petroleum Producers. “As far as new projects, those are being deferred or delayed.”
Rigs drilling for oil in the country fell to a seasonal six-year low, Baker Hughes Inc. data show. Companies including Suncor Energy Inc. and Royal Dutch Shell Plc have canceled or delayed oil-sands expansion projects.
CAPP’s forecast is based on a survey of its members. It also predicted production will rise to 4.64 million barrels a day by 2020 and 4.96 million by 2025 and oil sands output will grow to 4 million barrels a day by 2030 from 2.3 million this year.
Western Canada’s conventional oil output is forecast to drop to 1.3 million barrels a day by 2020 from 1.4 million now, Eastern Canada’s production will fall to 90,000 barrels a day from 220,000 this year.