Canadian crude oil production dropped in 2005, while profits soared

Canada's oil production dropped in 2005 for the first in six years as conventional supplies wane, but that should change as oilsands operations continue their rapid ramp-up. Companies pumped out 858 million barrels of crude last year, down 2.3% from the year before. One of the key reasons for this drop was a major fire at Suncor Energy, which cut production at Canada's second largest oilsands operation in half for three-quarters of the year.

Any increase in overall Canadian oil production will have to come from greater oilsands output, as "conventional oil has been on a mild and extended decline since about 1997," said Greg Stringham, vice-president of markets for the Canadian Association of Petroleum Producers.

While Canadian oil production dipped slightly last year, soaring prices for crude pushed oilpatch operating profits by 50% last year, going from close to $21 billion in 2004 to over $30 billion in 2005. Last year, Canada supplied almost 10 per cent of America's crude-oil needs with 99 per cent of oil exports heading south of the border. Despite large oil production in Alberta, Canadian refineries still relied on foreign oil imports to supply 55% of its refining needs - particularly to feed refineries in Ontario, Quebec and the Atlantic provinces.

- Funny how they keep calling tar sands "oil sands". But anyway, wait till Canada's natural gas falls off a cliff, then we'll see how these tar/oil sands operations fare.

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