DJ CIBC Sees Canada Oilsands As Largest New Oil Supply - CP
10 Jan 18:25
NEW YORK (Dow Jones)--As conventional oil reservoirs deplete rapidly around
the world, Canada's oilsands will be the biggest contributor to new global
supply by the end of the decade, CIBC World Markets predicted, according to a
Canadian Press report Tuesday.
And because state-owned firms control a major portion of global daily
production, the oilsands provide one of the few remaining growth opportunities
for investors, chief economist Jeff Rubin said.
"All of the net increase in oil production this year is expected to come from
non-conventional sources," CP quoted Rubin as saying said in a release. "While
deepwater oil is the primary source today, we forecast that Canadian oilsands
will become the single biggest contributor to incremental global supply by
2010."
The Toronto-based bank said a study of 164 new oil fields and projects around
the world shows that the price of oil will continue to rise over the next three
years if global demand doesn't wane.
As such, Rubin believes oil prices this year will eclipse last year's record
high, reached as major oil and natural gas infrastructure in the Gulf Coast was
being pounded by two major hurricanes.
Rubin also predicted that rising oil prices will give energy companies a vast
amount of cash in which to invest in large but expensive projects like the
oilsands, CP reported.
"Not only is depletion significant, but it is also accelerating, forcing more
and more reliance on non-conventional sources of supply, such as Canada's vast
but largely undeveloped oilsands," the CP quoted the CIBC release as saying.
The CIBC study says once depletion rates are factored in, global conventional
supply "seems to have peaked in 2004."
It said more than 60% of the 3.6 million barrels of new oil production
expected to come on stream this year will simply offset depletion from existing
fields insuch places as the North Sea and Kuwait.
After depletion, new supply is expected to grow by less than 1.5 million
barrels per day in the next two years, and by less than 1 million b/d in 2008.
Northern Alberta's oilsands are already the focus of massive amount of
development, with about C$100 billion worth of projects planned over the next
two decades.
Production is also expected to jump from the current 1 million b/d to upwards
of 3 million b/d in the next decade, CP reported.
(END) Dow Jones Newswires
01-10-06 1825ET
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