CAPP Releases 2007 Canadian Crude Oil Forecast and Market Outlook

    CALGARY, June 25 /CNW/ - The Canadian Association of Petroleum Producers
(CAPP) released its annual crude oil production, supply, markets and pipelines

    The highlights of this year's outlook include:
    -   Oil supply is slightly below last year's forecast in the early years,
        but slightly higher in last few years of the forecast period;
    -   The growth in oil sands more than offsets a gradual decline in
        conventional crude oil production;
    -   A first-time refinery survey indicates that the refinery demand
        outlook for western Canadian crude oil is aligned with the supply
    -   The pipeline projects that are currently in various stages of
        development will provide sufficient capacity to the 2010 - 2012
        period, if they receive regulatory approval and proceed according to
        plan; and
    -   There are numerous pipeline proposals to various markets in North
        America post 2012, but given the timelines to obtain regulatory
        approvals and to construct; the market must now focus on the next
        round of new capacity.

    "The changing mix of Canadian crude types from the traditional
conventional crude oil to oil sands upgraded light synthetic crudes and heavy
oil blends is also a big issue for the industry," said Greg Stringham, CAPP
Vice President, Markets and Fiscal Policy. "It's very important that pipeline
capacity is available on a timely basis, and that refineries are able to
process both the higher volumes and the changing mix."
    CAPP's 2007 production and supply forecast contains two cases, one
showing a pipeline planning case while the other is a more moderate case that
reflects the potential impacts of constraints on labour, materials and
regulatory processes. The higher case is intended to be used by industry to
plan for and develop pipeline projects to ensure adequate and timely
transportation capacity from western Canada. In the Pipeline Planning Case,
western Canadian crude oil supply is expected to increase from 2.4 million
barrels per day (b/d) in 2006 to almost 5.3 million b/d in 2020 while in the
Moderate Growth Case, western Canadian crude oil supply is projected to grow
to about 4.6 million b/d.
    For the first time, CAPP surveyed downstream refiners asking for their
long-term plans to process western Canadian crude oil. The results indicate
that demand for western Canadian crude oil by Canadian refineries is expected
to rise from 765,000 b/d in 2006 to almost 1.1 million b/d in 2015, a
44 per cent increase. Over the same period, United States refinery demand for
western Canadian crude is projected to increase from about 1.6 million b/d to
almost 3.1 million b/d.
    The growth in crude oil supplies will need more pipeline capacity to
ensure access to both new and existing markets. Numerous new pipeline
proposals and expansions of existing pipelines have been announced in recent
years. Producers and shippers are assessing the alternatives to determine
which projects will get market support.

    A copy of the report is available at

    The Canadian Association of Petroleum Producers (CAPP) represents 150
companies that explore for, develop and produce natural gas, natural gas
liquids, crude oil, oil sands, and elemental sulphur throughout Canada. CAPP
member companies produce more than 95 per cent of Canada's natural gas and
crude oil.

For further information:

For further information: or to schedule an interview, please contact:
Renée Kelly, CAPP Public Affairs, (403) 267-1152,,

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Canadian Association of Petroleum Producers

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