Canada's oil extraction industry to enjoy another year of record profits



    OTTAWA, Feb. 14 /CNW Telbec/ - Thanks to increasing oil sands production
and record high oil prices, profits in Canada's oil extraction industry are
expected to increase by almost 18 per cent to nearly $23 billion in 2008,
according to the Conference Board's Canadian Industrial Outlook: Canada's Oil
Extraction Industry - Winter 2008.
    Investment in upgrading projects and oil sands mines are finally paying
off, as non-conventional production is set to accelerate rapidly. In fact,
non-conventional oil production will be the main driver behind gains in
domestic crude production for the foreseeable future, as conventional
production continues to decline steadily. Total crude production will increase
by 9.2 per cent this year and is expected to grow steadily over the forecast
period.
    "With the price of oil expected to stay well above US$80 per barrel for
the entire year, industry profits will once again reach new highs in 2008,"
said Todd Crawford, Economist. "However, rising industry costs and an expected
decline in prices next year, due to additional global supply coming online,
should cause profits to weaken in 2009."
    Profits are expected to fall by about 29 per cent in 2009, but will grow
again beginning in 2010.
    Increasing costs continue to be a concern for the industry. Labour and
material shortages are commonplace for energy companies in Western Canada, as
companies scramble to obtain the material and labour needed to complete their
projects.
    Alberta's royalty increases, which are scheduled to begin in 2009, are
expected to have little effect on investments in Canada's oil industry because
the price of oil will remain high.




For further information:

For further information: Brent Dowdall, Media Relations, (613) 526-3090
ext. 448, corpcomm@conferenceboard.ca


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