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Updated June 2021

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Total Production

Total combined in situ and mined bitumen production declined by 4 per cent in 2020, to 473.7 thousand cubic metres per day (103 m3/d), or 2981 thousand barrels per day (103 bbl/d) (Table S3.1). The last time total bitumen production levels declined was during the global financial crisis of 2008.

A rebound in production levels is expected to begin in 2021. By 2030, total bitumen production is forecasted to increase to 641.9 103 m3/d or 4039 103 bbl/d.

Production Limit

The Government of Alberta announced production curtailment rules in December 2018 in response to record price discounts for Alberta’s crude oil mix. These rules took effect in January 2019 and were intended to remain in place until December 2021.

Given the economic downturn of 2020, lower inventories, and sufficient export capacity, the government discontinued the production limit program in December 2020. The government may reinstate production limits if oil inventories approach maximum capacity levels within four to six months.

Market Conditions

Global crude oil demand dropped rapidly during the first quarter of 2020 as governments implemented measures to contain the spread of COVID-19. Initially, the Organization of the Petroleum Exporting Countries (OPEC+) and other large producers were at odds over efforts to manage global supply levels in response to the economic shock. With a rapid decline in demand and no immediate adjustments in supply, global crude oil price benchmarks dropped to recent historical lows, leading producers worldwide to shut-in production as inventories filled up rapidly.

In April 2020, OPEC+ struck an agreement to bring supply back into balance, leading to a 9.7 106 bbl/d supply cut. The combination of active supply management and recovering demand led to a recovery in crude oil prices and production in the latter part of 2020.

Emerging Trends

Oil sands producers will continue to find ways to optimize their operations amid a challenging price environment, which may lead to more consolidation. Larger companies with specialized knowledge and ample access to capital can implement cost-reduction measures, maximize their productive capacity, and bring new projects to life with more flexibility.

The availability and allocation of capital among oil sands companies will be increasingly impacted by environmental, social, and governance (ESG) investment considerations. A growing number of oil sands producers have pledged to reach net-zero carbon emissions for their operations over the coming decades. This additional focus on the environmental aspect of projects will shift capital towards lower-emission projects and technology investments.