The Canadian Industrial Outlook sets the stage for the Canadian economy by examining 10 key industries. Revenues and costs are projected to analyze the profitability of each industry through to 2008.
Canada’s Oil and Gas Industry: Industrial Outlook, Summer 2006
Canada’s Oil and Gas Industry: Industrial Outlook, Summer 2006
Industry Economic Analysis
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Profits in Canada’s oil and gas sector are set to fall by 22 per cent from last year’s high of $25 billion, because still-high oil prices won’t make up for the abrupt drop in natural gas prices.
Natural gas production will also decline by 1.2 per cent. But crude oil production is forecast to rise by 11.4 per cent in 2006, led by synthetic crude oil, bitumen and offshore oil.
Between 2007 and 2010, labour shortages will drive up labour costs in the oil sands, while strong commodity prices boost material costs. Still, sector revenues are expected to grow by an average of 6.7 per cent per year, as crude oil trades well above US$55 per barrel, allowing profits to climb back up close to last year’s high by 2010. The changing mix in oil production toward heavier oil and the falling productivity of natural gas wells will keep profits from growing even more.
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