"A regime change in Venezuela could both help that country regain its former prominence as an oil producer and pose a threat to Canada's industry, which is producing record amounts of oil and is expected to continue to grow for several more years. The Canadian sector has fared better than expected in the past year even amid persistently low commodity prices. Production continues to climb as oilsands facilities expand their operations."
"But Canadian energy company stocks plunged on Monday morning, following the ouster of Venezuela's Nicolas Maduro by the U.S. With Washington's involvement in Venezuela there's speculation that that country's industry could undergo a renaissance and experts say rising Venezuelan production could bruise the Canadian industry in the long run. The challenge will be attracting major investment dollars from U.S. companies no small feat considering the "monumental" amount required to fix Venezuela's broken oil industry, says Commodity Context oil analyst Rory Johnston."
Venezuela's oil sector could rebound after a regime change, potentially restoring large-scale heavy-oil output and increasing exports to the U.S. Gulf Coast. Canadian oil production is at record levels and continues to grow as oilsands expand, but rising Venezuelan production could eventually compete with Canadian supply and pressure prices. Significant investment and repairs are required to revive Venezuela's broken industry, and attracting U.S. companies will be challenging because of the "monumental" cost and past losses. Venezuela holds the world's largest oil reserves and produces heavy crude similar to Western Canada, making any recovery strategically important for North American markets.
Read at www.cbc.ca
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