OTTAWA -- Spiraling costs will cause profits in Canada's oil industry to "plummet" almost 25% this year before recovering in 2008, a new report from the Conference Board of Canada shows.
"Lower oil prices earlier in the year and rapidly rising industry costs will cut into industry profits in 2007," said Louis Theriault, director, Canadian industrial outlook service with the Conference Board. "But at $13-billion, profits will still be high by historical standards."
Gains in production and improved productivity will see profits rise starting next year, according to Canadian Industrial Outlook: Canada's Oil Extraction Industry Summer 2007, released Wednesday. Profits in the industry peaked in 2006.
"Rising costs in Canada's oil sector are becoming increasingly problematic for energy companies," said the report. "Labour and material shortages in Alberta are pushing the cost of new investment projects to near-prohibitive levels."
"Lower oil prices earlier in the year and rapidly rising industry costs will cut into industry profits in 2007," said Louis Theriault, director, Canadian industrial outlook service with the Conference Board. "But at $13-billion, profits will still be high by historical standards."
Gains in production and improved productivity will see profits rise starting next year, according to Canadian Industrial Outlook: Canada's Oil Extraction Industry Summer 2007, released Wednesday. Profits in the industry peaked in 2006.
"Rising costs in Canada's oil sector are becoming increasingly problematic for energy companies," said the report. "Labour and material shortages in Alberta are pushing the cost of new investment projects to near-prohibitive levels."
