CANADIAN OILPATCH / OUTLOOK
Thursday, November 7, 1996
Oilpatch picture promising
The Canadian petroleum industry is charting a course of continued modest growth, thanks to robust crude oil prices, strengthening natural gas prices and world-beating innovation and technology, say a pair of experts.
Greg Stringham, manager of regulatory affairs for the Canadian Association of Petroleum Producers and Paul Ziff, president of Ziff Energy Group, painted a promising picture of the oilpatch at yesterday's Business Outlook '97 conference.
Stringham and Ziff said a myriad of trends suggest positive developments for Canada's energy industry over the next several years.
"Our overall view of the industry for 1997 is a cautiously optimistic outlook," said Stringham, citing favorable commodity prices, near-record exploratory drilling, massive oilsands expansion and enhanced pipeline capacity to the U.S. as key drivers in his outlook.
Ziff agreed the industry's short-term future is good, but noted there will continue to be shakeout.
"The outlook overall is quite bright, but you shouldn't translate this to the idea that all companies will do equally well," said Ziff, suggesting the victors will be those best able to use new technology to their advantage.
"The best will do very well and the others will not be with us in the future," he said.
CAPP is forecasting natural gas prices will average $1.60 per thousand cu. ft. (mcf) in 1997, rising to $2 per mcf by the year 2000.
With new pipeline capacity coming on stream in 1998, Canadian natural gas production is expected to rise from 5 trillion cu. ft. (tcf) in 1996 to 6 tcf by the year 2000, largely fuelled by increasing U.S. demand.
However, Ziff cautioned additional pipeline capacity could lead to a "boom" in gas drilling, which could cause prices to collapse as they did in 1994.
On the crude oil front, CAPP is forecasting prices will average $24 US a barrel this year, falling to between $18 US to $19.50 US next year and then inching up to $20 US over the following three years.
However, Stringham noted the continued uncertainty in the Middle East over Iraq's re-entry to the world oil market could have an immediate negative impact on prices. |
