Canada’s Oil Sands: A World-Scale Hydrocarbon Resource
Transcript of Canada’s Oil Sands: A World-Scale Hydrocarbon Resource
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 1
1
Canada’s Oil Sands:A World-Scale Hydrocarbon Resource
11th Annual Asia Oil & Gas Conference“Balancing the Interests of Consumers and Producers”
11-13 June 2006Kuala Lumpur Convention Centre, Malaysia
R.B. (Bob) DunbarStrategy West Inc.
Calgary, Alberta, Canada
Photo courtesy Syncrude Canada Ltd.
2
Presentation Outline
OverviewBitumen Recovery TechnologiesBitumen UpgradingMarketsCostsOutlookChallenges
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 2
3
Canada’s Oil Sands
Bitumen saturated sandsAt normal temperatures (10-200C) bitumen is:• In a semi-solid state• Similar to tar
Enormous Resource Base• World’s largest bitumen
deposit• Canada’s bitumen
reserves match Saudi Arabia’s conventional oil reserves
Photos courtesy Syncrude Canada Ltd.
4
Resources and Reserves
Initial volume in place (bitumen): 1,699 x 109 barrels
Initial established reserves: 178.7 x 109 barrels
Cumulative production:4.6 x 109 barrels
Remaining established reserves: 174.1 x 109 barrels
Source: EUB ST98-2005; Alberta’s Reserves 2004 and Supply/Demand Outlook 2005-2014; September 2005
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 3
5
Mineable and In SituResources and Reserves
Mineable Resources/Reserves< 75m depth to top of oil sands formationAthabasca only6% of IBIP; 20% of initial established reserves; 68% of cumulative production
In Situ Resources/Reserves> 75m depth to top of oil sands formationAthabasca, CL and PR94% of IBIP; 80% of initial established reserves; 32% of cumulative production
Source: EUB ST98-2005; Alberta’s Reserves 2004 and Supply/Demand Outlook 2005-2014; September 2005
6
Athabasca Volume In-Place
Athabasca Wabiskaw-McMurray Oil Sands DepositBitumen pay criteria> 6% bitumen (mass)> 1.5 m
Source: EUB Alberta’s Reserves 2004 and Supply/Demand Outlook 2005-2014
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 4
7
In Situ Recovery Technologies
Primary RecoverySecondary RecoveryThermal Tertiary Recovery• Steam-Based Thermal Recovery Processes
Cyclic Steam Stimulation (CSS)Steam Assisted Gravity Drainage (SAGD)
• In Situ CombustionToe-to-Heel Air Injection (THAI)
Solvent-Based Tertiary Recovery• VAPEX • Thermal Solvent
Hybrid (Steam-Solvent) Processes
8
Thermal In Situ Recovery
Cyclic Steam Stimulation(CSS)
Steam Assisted Gravity Drainage (SAGD
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 5
9
Surface Mining, Bitumen Extraction and Upgrading
Source: Athabasca Oil Sands Project
10
Albian Conveyors and Storage Silo
Source: Athabasca Oil Sands Project
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 6
11
Albian Extraction Plant
Source: Athabasca Oil Sands Project
12
Upgrading
Approximately 2/3 of produced bitumen is “upgraded” to synthetic crude oil (SCO) before pipeline shipment to downstream marketsThe remaining 1/3 is blended with diluents before pipeline shipment to downstream markets
Synthetic Crude Oil:A mixture of hydrocarbons,
similar to light crude oil, that is derived by
upgrading crude bitumen or heavy oil
Photo courtesy Syncrude Canada Ltd.
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 7
13
Typical Upgrading Configuration
14
Canadian Oil Production - 2005
530
434
834
524
157
Synthetic Bitumen Light Heavy Condensate
Alberta’s Oil Sands provided 39% of Canada’s “crude oil” production in 2005 (total 2,480 kb/d)
(all figures thousand b/d)
Source: National Energy Board; March 24, 2006
Total SCO and Bitumen 964 kb/d
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 8
15
Bitumen Based Feedstocks to Refined Products
Bitumen Blends
Synthetic Crude Oil
Refined Petroleum Products
REFINERY
GasolineDieselJet FuelFuel OilsLubricantsAsphaltOthers
16
Markets for Western Canadian Oil
CoreCoreMarketsMarkets
Tesoro-Anacortes
BP-Cherry Point
Tesoro-Mandan
Sinclair-RawlinsChevron
TexacoHolly
MAP-St.Paul
ConocoPhillips-Wood RiverNCRA-
McPherson
Sinclair-Casper
Imperial
Petro-CanadaShell Canada
ChevronTexaco-BurnabyHusky-Lloydminster
Coop-Regina
ExxonMobil
Cenex
ConocoPhillips-Billings
Shell-Anacortes
ConocoPhillips-Ferndale
Montana Ref-Great Falls
TesoroFlying J
Farmland-CoffeyvilleConocoPhillips-
Ponca City
Premcor-Lima
MAP-Catlettsburg
BP -ToledoExxonMobil-Joliet
Citgo-Lemont
Koch-Pine Bend Imperial-
Nanticoke
PetroCanada-Oakville
BP-Whiting
United-Warren
Frontier-El Dorado
ImperialShellSuncor
Salt Lake City
Suncor
Frontier-Cheyenne
Sinclair-Tulsa
Sunoco -Toledo
Sarnia
MAP-Detroit
MAP-Canton
Murphy-Superior
Valero
ExtendedExtendedMarketsMarkets
MAP-Robinson
Edmonton
ConocoPhillips - Borger
Husky-Prince George
NewNewMarketsMarkets
San Francisco
Los Angels
Houston
Source: Canadian Association of Petroleum Producers
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 9
17
Beyond North America
Prince Rupert/Kitimat
Los Angeles
Jose/La Cruz
3,840
ChinaPersian
Gulf
Japan
Taiwan
~ 8,600 N Miles
~ 4,500 N Miles
Prince Rupert/Kitimat
Jose/La Cruz
Los Angeles
Japan
Taiwan
Target Markets
~ 5,400 N Miles
1,400 N
Miles
Far East U.S West Coast
• •••
Japan
Taiwan
Korea
•
•
SantaCruz• •1,790
Competitive travel distances for Canadian supply to both markets
Source: Canadian Association of Petroleum Producers
18
Oil Sands Industry Supply Costs
Bitumen Supply Cost at Plant Gate
0
5
10
15
20
25
CHOPS CSS SAGD M&E
C$/
b (2
004)
2004 Study 2005 Study
Equivalent WTI Price at Cushing OK
0
5
10
15
20
25
30
35
40
CHOPS CSS SAGD M&E ME&U
US$
/b (
2004
)
2004 Study 2005 Study
Source: Canadian Energy Research Institute; CERI Oil Conference; May 2005
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 10
19
Oil Sands Industry Outlook
Unadjusted Outlook• Assumes all existing and proposed
projects are developed and meet their scheduled startup dates
Adjusted Outlook• Project-by-project timing adjustments• Project-by-project probability assessment
20
Unadjusted Bitumen Production
0
1,000
2,000
3,000
4,000
5,000
6,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Una
djus
ted
Bitu
men
Pro
duct
ion
(kb/
d)
Primary & ExperimentalPeace River In SituCold Lake In SituSouth Athabasca In SituNorth Athabasca In SituAthabasca Mining
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 11
21
Adjusted Bitumen Production
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Adj
uste
d B
itum
en P
rodu
ctio
n (k
b/d)
Primary & ExperimentalPeace River In SituCold Lake In SituSouth Athabasca In SituNorth Athabasca In SituAthabasca Mining
22
Adjusted SCO and Non-Upgraded Bitumen Supply
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Adj
uste
d SC
O a
nd N
on-U
pgra
ded
Bitu
men
(kb/
d)
Non-Upgraded BitumenSynthetic Crude Oil
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 12
23
Adjusted Case CAPEX
Average Annual Capital Expenditures (2005-2020, US$2006 Real)• Thermal In Situ $1.4 Billion• Mining & Extraction $1.5 Billion• Upgrading $3.6 Billion• Total $6.5 Billion
Strategic Capital only – figures do not include sustaining capital
24
Challenges Facing the Oil Sands Industry
Environmental• Air emissions –
GHGs and Criteria Air Contaminants
• Water use• Waste water
disposal• Land disturbance
and reclamation• Cumulative effects
Labour Availability & Productivity Capital CostsEnergy Use, Sources & CostsOthers
11th Annual Asia Oil & Gas Conference June 11-13, 2006
Canada's Oil Sands: A World-Scale Hydrocarbon Resource 13
25
Conclusions
Canada’s oil sands are one of the world’s largest hydrocarbon accumulationsThe industry is well developed and making a significant contribution to world oil supplyOil sands projects are economically attractive at US$30-35/b WTIThe industry faces many challenges but will overcome them and continue to grow
26
Thank YouQuestions?
Strategy West maintains an up-to-date list of existing and proposed oil sands projects at www.strategywest.com
Photo courtesy Syncrude Canada Ltd.