Oil output up to record level
14 Mar 2013
Oil output up to record level
Production jolt led by oilsands
Canada’s defiant oil industry shrugged off criticism as it cranked up production to four million barrels a day last December — its highest output ever, according to the International Energy Agency.
“Canadian oil production has increased rapidly over the last several months, reaching an all-time high of 4.1 mbpd in December on the back of a record one million bpd in synthetic crude output from surface mining operations,” the IEA said in a report published Wednesday.
Growth was not restricted to the oilsands. Alberta light and medium output also rose to 440,000 barrels per day, its highest level in a decade, on the back of new light tight oil developments in Cardium and Viking in Alberta, along with other plays in Saskatchewan and Manitoba, the IEA said.
Canada’s eastern offshore production stood at around 250,000 bpd in December.
The record ramp-up in production came as some of the oilsands’ biggest critics expressed hope that the U.S. rejection of the Keystone XL pipeline would slow down heavy crude production in Alberta.
“The markets are relentless and will continue to search for ways to move that product into the United States, whether Keystone XL is approved or not,” Jim Prentice, vice-chairman of the Canadian Imperial Bank of Commerce, told the Financial Post from New York, where he gave a speech on the pipeline’s role in North America’s quest for continental energy security.
The U.S. State Department issued an environmental assessment on the Alberta-Gulf Coast project on March 4 and is in the midst of a 45-day public review. A decision on the project could come any time after that.
“The project is in the national interest of both Canada and the United States … I think it’s a mistake to exile the oilsands from the resource bounty that we have as North Americans, and attempting to extricate it from the North American marketplace … is impractical,” Prentice said.
With North American oil pipelines clogged and Northern Gateway project stuck in the review phase, railways have come to the rescue. More than 30,000 tank cars are being built across North America to ship rising production from Alberta, Bakken and other tight oil plays. Analysts estimate somewhere between four per cent and seven per cent of North American oil production is being shipped by rail.
“One way or another, oilsands is going to grow and production needs to get out of there,” said Leo Mariani, analyst at RBC Capital Markets.
However, Keystone XL’s rejection could crimp production in the short run.
“At a minimum, it will stall some of the development plans for the oilsands,” Mariani said. “I would certainly expect to see Canadians find an alternative route but that is going to add substantially to the time on the project.”
via Prosperity Saskatchewan http://prosperitysaskatchewan.wordpress.com/2013/03/14/oil-output-up-to-record-level/