In sharp contrast to the grim medium-term prognosis for the Canadian oilsands, Exxon Mobil Corp. is predicting sunnier times for bitumen in the decades ahead.
The world’s largest publicly listed oil company said production from Canada and Venezuela’s oilsands will “quadruple” to nine million barrels per day over the next 24 years.
“A significant shift is foreseen in North America, which is poised to emerge as a net liquids exporter due to projected strong growth in tight oil, oilsands and NGLs (natural gas liquids),” the company said in its latest annual outlook, published Monday.
Venezuela produced 1.4 million barrels per day from its oilsands deposits last year, while Canada’s estimated output from the oilsands alone stood at 2.82 million bpd.
Exxon did not provide a breakdown of Canadian oilsands’ contribution to the new production, but the Western Canadian Sedimentary Basin is a key component of the oil company’s bullish forecast for North American production.
“…Within North America, rising oilsands production will enable Canada to continue exporting its surplus heavy crude to the U.S., whose refining system generally is designed to process heavier grades of crude,” the outlook stated.
As with previous forecasts, the company’s annual outlook is bullish on oil despite prices falling 72 per cent over the past 18 months, and global calls to curb energy-related carbon emissions.
Exxon has been accused of hiding research that linked fossil fuel’s impact on global warming, with attorney generals in New York and California states reportedly investigating whether the company lied to shareholders about the risk of climate change.
The latest outlook sticks to the company’s long-held belief that fossil fuels will continue to dominate the energy market over the next few decades, despite pledges by 200 countries in Paris last month to cut fossil fuel consumption and rein in greenhouse gas emissions. Exxon expects hydrocarbons to meet three-quarters of energy needs till 2040, with renewable energy making up around 15 per cent of global demand.
The rosy outlook for the oilsands comes amid grim immediate prospects for producers in both Canada and Venezuela.
Venezuela, which holds around 220 billion barrels of oilsands deposits in its Orinoco belt alone, is politically unstable with falling oil production. Meanwhile, Canada is handicapped by lack of pipeline access to world markets and new climate change policies in Alberta that’s likely to limit growth.
Extraction of the viscous bitumen is considered among the most carbon-intensive processes in the world.
The Canadian oilsands also suffer from high costs, compared to deposits in other parts of the world, making them unattractive at a time of sub-US$30 per barrel oil prices. Canada led the world in project deferrals last year, with oilsands projects with a combined production of three million bpd shelved by oil companies, according to Tudor Pickering Holt & Co.
Exxon, which owns a majority stake in oilsands producer Imperial Oil Ltd., is looking past the challenges, noting that rising global population and economic growth in emerging markets will lead to a 35 per cent surge in global energy demand.
U.S. oil production will rise to more than 15 million bpd by 2040 — around a 70 per cent increase from 2010.
“North America as a whole will see a similar growth rate through 2040, reaching 26 MBD — more than twice the current production of Saudi Arabia.”
The continent’s unconventional gas production will also nearly triple by 2040, surpassing the combined output of Russia and the Caspian region, the forecast said.