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Canada's Oil Industry to Lose Money and Jobs in 2015

Ottawa, March 25, 2015—The collapse of oil prices in the second half of 2014 will take a bite out of the Canadian oil industry’s finances. Revenues are expected to fall by 37 per cent and the industry will post a pre-tax loss of more than $3 billion and shed close to 8,000 jobs this year, according to The Conference Board of Canada’s latest Canadian Industrial Outlook: Canada’s Oil Extraction Industry.

“With WTI prices now hovering below US$50 and most projections climbing slowly to US$80 a barrel in the next few years, the Canadian oil industry is coming to grips with the new price environment,” said Mike Shaw, Economist, The Conference Board of Canada. “Canadian companies have quickly cut billions from their investment plans, as well as instituted layoffs and hiring freezes to minimize losses. Consolidations and reevaluations of spending plans will likely continue through 2015 and 2016.”


  • Oil industry revenues expected to fall by $43 billion and the industry will shed close to 8,000 jobs this year.
  • Oil investments are expected to fall from $56 billion last year to $44 billion in 2015.
  • Despite low oil prices, production from the oil sands will continue to grow in 2015.

Prices are projected to average US$55 per barrel in 2015 as cuts in investment ease production growth and low prices spur demand. However, the days of triple digit oil prices have passed for the immediate future. With the rise of horizontal drilling and hydraulic fracturing, the U.S. industry will be able to quickly respond and increase production if prices reach US$80 a barrel, putting a hard cap on prices.

The lower oil price environment is expected to take a big bite out of investments in the Canadian oil patch. At current prices, many new projects in both the oil sands and Canadian tight oil plays are seen as uneconomic. While supply costs vary, breakeven costs range between US$60–80 per barrel for a Steam Assisted Gravity Drainage (SAGD) facility (the non-mining method of oil sands extraction) and US$90–100 per barrel for an oil sands mine. Overall, oil investments are projected to fall from $56 billion last year to $44 billion this year and $40 billion in 2016.

Despite the gloomy outlook for oil prices and investment, Canadian oil production is expected to increase in 2015 and through the end of the forecast as billions of dollars already invested in capacity in recent years feed into greater production. Total crude production is forecast to increase by 175 thousand barrels per day in 2015, going from 3.6 million barrels per day (mmbd) last year to 3.8 mmbd this year.

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