Canada oil sands market reserves reached 169.2 billion bbl during 2011

London 11/23/2012 10:20 PM GMT (TransWorldNews)

Canada holds the largest crude oil deposits outside the Middle East, most of which are in the form of oil sands, and are expected to play a major role in supplying the world's future energy requirements.

Canada is one of the leading countries in the world in terms of proved oil reserves, with 175.2 billion barrels (bbl) of proved oil reserves at the end of 2011, out of which 169.2 billion bbl of reserves were available as oil sands. Development of the oil sands industry in Canada will continue to be spurred on by the continuous growth of global oil demand and high crude oil prices, as oil sands projects once seen as economically unviable are now being considered profitable. The favorable business and political climate in Canada, and continuous technological advancements are also set to support industry growth.

Oil sands are essentially bitumen, an extra-heavy crude oil, mixed with sand, water, and clay, or other minerals. Bitumen is so viscous that it cannot be pumped or flow without heating or dilution, and needs treatment before undergoing processing in refineries.

Production from the Canadian oil sands industry is expected to increase in the future, due to the start of new projects, and the development of technologies which will enable enhanced oil sands processing. Substantial financial activity is taking place in the market, with several companies making investments. The industry also saw the announcement of a significant acquisition in 2012 –the acquisition of NexenInc by China's CNOOC Ltd for $15.1 billion – which reflected a global interest held in Canada's unconventional oil assets. Syncrude, the largest oil sands project in Canada, is also expected to undergo expansion by 2018, and Fort Hills is one of the largest planned oil sands projects, with a capacity to produce 160,000bbl/d by 2016.

The huge oil sands reserves in Canada will contribute towards global energy security. Canada is already the largest supplier of crude oil and petroleum products to the US, accounting for nearly 25% of US crude oil and petroleum imports in 2011. International Oil Companies (IOCs) can currently access only one in six barrels of the world's known oil reserves, and approximately half of these reserves are available in Canada as oil sands deposits. Canada therefore could play a substantial role in ensuring future global energy security.

However, the development of oil sands in Canada is attracting criticism due to several issues such as high water use and Greenhouse Gas (GHG) emissions.

The oil sands industry in Canada produced approximately 408.2 million barrels (MMbbl) of bitumen and synthetic crude in 2006, growing at an Average Annual Growth Rate (AAGR) of 7.1% to reach 581.9 MMbbl in 2011. Production is expected to increase to 1,157.8 MMbbl by 2020.

Key Highlights


According to BP Plc's Statistical Review of World Energy 2012, Canada was ranked third in the world in terms of proved oil reserves for 2011 (BP Plc ,2012). The country recorded 175.2 billion barrels (bbl) of proved oil reserves at the end of 2011, of which 169.2 billion bbl of reserves were in the form of oil sands. BP Plc also estimated that 25.9 billion bbl of proved oil sands reserves were under development in Canada at the end of 2011. This implies that Canada still offers substantial scope for further extraction of oil from its oil sands resources.

The huge oil sands reserves located in Canada are significant for the global energy security. In the current context, International Oil Companies (IOCs) can freely access the equivalent of only one in six barrels of the world's known oil reserves currently, and approximately half of these reserves are available in Canada as oil sands deposits. Therefore the Canadian oil sands deposits could soon emerge as a major source of crude for the IOCs and are expected to play a substantial role in ensuring the energy security of the world in the future.

Even for the US, Canadian oil sands are also very important. Canada is the largest supplier of crude oil and petroleum products to the US. In 2011, Canada accounted for approximately 24.3% of the total US crude oil and petroleum products imports. Even in the future, Canada is expected to continue as a major supplier of crude to the US and the majority of this crude could come from the oil sands deposits.

Canada Witnessed Production of 581.9 Million Barrels of Bitumen and Synthetic Crude from its Oil Sands Resources in 2011

The oil sands industry in Canada produced approximately 581.9 million barrels (MMbbl) of bitumen and synthetic crude in 2011. During the 2006-2011 period, production of bitumen and synthetic crude from the Canadian oil sands increased from 408.2 MMbbl to 581.9 MMbbl, at an Average Annual Growth Rate (AAGR) of 7.1%.

In Canada, bitumen and synthetic crude production from oil sands in carried out in three regions - Athabasca, Cold Lake and Peace River. Out of the three, Athabasca recorded the largest bitumen production from oil sands in 2011. The region produced approximately 459.7 MMbbl of bitumen and synthetic crude in that year. The Cold Lake region produced 114.6 MMbbl of bitumen and synthetic crude while Peace River recorded negligible production of 7.6 MMbbl in the year.

Bitumen and Synthetic Crude Production from Canada's Oil Sands is Expected to Increase to 1,157.8 MMbbl by 2020

The oil sands industry in Canada is expected to produce approximately 1,157.8 MMbbl or 3.2 MMbbl/d (per day) of bitumen and synthetic crude by the end of 2020. During the 2011-2020, the production of bitumen and synthetic crude from the Canadian oil sands is expected to increase from 581.9 MMbbl in 2011 to 1,157.8 MMbbl by 2020 at an AAGR of 7.6%.

The production of bitumen and synthetic crude from Canada's oil sands is estimated to increase primarily due to an expected increase in the production of several existing projects and the start of several new projects. Syncrude, the largest oil sands project in Canada, is expected to add a debottleneck Stage 3 by 2016 and undergo a Stage 4 expansion by 2018. Amongst the planned oil sands projects in Canada, Fort Hills is one of the largest with a capacity to produce 160,000bbl/d by 2016.

High Mergers and Acquisitions Activities Reaffirm the Significant Industry Interest in Canada's Oil Sands

During the 2010 to August 2012 period, the Canadian oil sands industry witnessed more than 100 financial deals (including mergers, acquisitions and private equity, venture capital, and asset transactions). In 2012, up to August, the oil sands industry witnessed approximately 28 deals. In 2011 and 2010, the oil sands industry witnessed approximately 41 deals in each year.

The high financial deal activity in the Canadian oil sands industry has indicated the global interest in the Canadian oil sands industry. In 2012, the Canadian oil sands industry witnessed the announcement of two large deals by National Oil Companies (NOCs) from India and China. One was the announced acquisition of Nexen Inc by China's CNOOC Ltd. Nexen has substantial oil sands interests in Alberta, Canada. The other was the planned acquisition of ConocoPhillips' six oil sands projects in Alberta by a consortium of three Indian NOCs - Oil and Natural Gas Corporation Limited (ONGC), Oil India Limited (OIL) and Indian Oil Corporation Ltd (IOCL). The proposed deals reflect the interests of Indian and Chinese NOCs in unconventional oil assets in order to reinforce their global oil portfolios due to growing demand for oil in their domestic markets.

Report Overview


This report provides an overview of the oil sands industry in Canada and analyses some of the major drivers and challenges, project economics of oil sands projects, historic and projected bitumen and synthetic crude production, some of the major existing and planned oil sands projects, financial deal activity, and the competitive landscape in the industry.

The report has been compiled using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis by our team of industry experts.

Canada is one of the largest countries in the world in terms of proved oil reserves and was ranked third in the world in terms of proved oil reserves at the end of 2011. It had 175.2 billion barrels (bbl) of proved oil reserves at the end of 2011, of which 169.2 billion bbl of reserves were available as oil sands. This is expected to play a major role in ensuring the world's future energy security.

Scope


This report analyzes the oil sands industry in Canada, including major drivers and challenges, competitive landscape and forecasts to 2020. The report primarily focuses on -
- Drivers and challenges in the oil sands industry
- Key existing and planned oil sands projects in Canada
- Bitumen and synthetic crude production and forecasts until 2020
- Heavy oil upgrader capacity and forecasts until 2020
- Financial deal activity
- Key companies

Reasons to buy


This report will enhance your decision-making capabilities by allowing you to -
- Identify some of the key drivers and challenges for the oil sands market in Canada
- Gain an insight into historic bitumen and synthetic crude production and forecasts until 2020
- Understand the project economics in the oil sands industry based on yearly capital expenditure and operational expenditure
- Gains an insight into the financial deal activity of the oil sands industry in recent years
- Understand the key companies in Canada's oil sands industry



Click for Report details:Oil Sands Industry in Canada - Market Analysis, Competitive Landscape and Production Forecasts to 2020



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