Growth in development and production of oil sands will spur industry revenue.
New York, NY (PRWEB) May 31, 2014
The Oil Drilling and Gas Extraction industry is highly dependent on global market prices of crude oil and natural gas. Canada has recently entered a boom in oil and natural gas extraction, largely encouraged by technological improvements that have enabled the production of Alberta's oil sands. “Canada continues to be one of the largest energy producers in the world, and this position in global energy markets is expected to continue in the five years to 2019,” according to IBISWorld Industry Analyst James Crompton. As international oil companies continue to invest in Canadian resources, IBISWorld expects that the industry will continue to perform steadily. In the five years to 2014, industry revenue is expected to increase strongly from recessionary lows at an annualized rate of 7.8%, totaling $128.9 billion, which includes revenue growth of 0.9% in 2014.
Hydraulic fracturing and horizontal drilling techniques have experienced a surge in popularity and effectiveness. These techniques have allowed industry operators to tap into previously uneconomical deposits, most notably in the oil sands of Alberta. The oil sands now account for an estimated 98.0% of Canada's total oil reserves, according to the US Energy Information Administration. “Canada's amount of proven reserves only trails Saudi Arabia and Venezuela; consequently, international oil companies have increasingly invested in Canada's oil and gas sectors,” says Crompton. In addition to Canada's status as one of the world's largest energy producers, it also remains as one of the largest import sources of oil and gas products for the United States. The vast majority of the industry's exports are destined for the United States' refineries, and this is a trend that is expected to continue in the five years to 2019.
In the five years to 2019, the industry is expected to continue performing strongly. Continued extraction of Alberta's oil sands and offshore locations are expected to drive industry performance, as is trade with the United States. The world prices of natural gas and crude oil are expected to rise in the five years to 2019, providing support for the industry's relatively high profit margins. Additionally, as the United States recovers from the recession, exports are expected to continue growing at a strong rate.
For more information, visit IBISWorld’s Oil Drilling and Gas Extraction in Canada industry report page.
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IBISWorld industry Report Key Topics
Firms in this industry operate and develop oil and gas field properties. Activities include the exploration and production of crude petroleum; the mining and extraction of oil from oil shale and oil sands; the exploration and production of natural gas; sulfur recovery from natural gas; and recovery of hydrocarbon liquids. Firms may operate oil and gas wells on their own account or for others on a contract or fee basis.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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