Post on 30-Mar-2015
Canadian Oil and Natural Gas
IPAA Midyear Meeting
Greg StringhamJune 16, 2005
Canada’s Oil and Gas Industryin the North American Energy Economy
• Canada is the world’s 3rd largest natural gas producer
• Canada is the world’s 9th largest crude oil producer and moving up the list quickly
with oil sands production increasing
• Industry Overview 500,000 jobs C$35 Billion capital investment C$20 Billion in payments to
federal and provincial governments
#1 private sector investor in Canada
• Canada is the largest supplier of energy to the United States
2004Canadian Natural
Gas
Canadian Petroleum
Ranking of importers to U.S.
Share of U.S. consumption
15% 10%
Share of U.S. imports
85% 16%
#1 #1
Top 10 Natural Gas Producers in 2004
0 5 10 15 20 25
Saudi Arabia
Indonesia
Iran
Norway
Netherlands
Algeria
United Kingdom
Canada
United States
Russia
Trillion Cubic FeetSource: Oil & Gas Journal
Top 10 Crude Oil Producers in 2004
0 2 4 6 8 10
UAE
Canada 2004
Venezuela
Norway
Mexico
China
Iran
USA
Russia
Saudi Arabia
Million Barrels per Day
Source: EIA & CAPP
Oil sands growth will move Canada from #9 to #5 in the world by 2015
Top 10 Crude Oil Producers in 2004
0 2 4 6 8 10
UAE
Venezuela
Norway
Mexico
China
Canada 2015
Iran
USA
Russia
Saudi Arabia
Million Barrels per Day
Source: EIA & CAPP
Oil sands growth will move Canada from #9 to #5 in the world by 2015
0
500
1 000
1 500
2 000
2 500
Canada Mexico SaudiArabia
Venezuela Nigeria Iraq Algeria United Kingdom
Angola Russia Norway Kuwait
thou
sand
bar
rels
per
day
U.S. Imports of Crude Oil and Petroleum Products by Country of Origin
Petroleum Products
Crude Oil#1
Source: EIA
Canada, is the largest (#1) supplier of crude oil and of crude oil and petroleum products to the US.
Industry Structure of the Upstream Sector Based on Oil and Gas Production (boe)
Intermediates15%
Juniors21%
Majors64%
Intermediates8%
Juniors11%
RoyaltyTrusts15%
Majors66%
1997 2004
Majors - > 100,000 b/dIntermediates - < 100,000 >15,000 b/dJuniors - < 15,000 b/d
Total Wells Drilled in Canada
0
4,000
8,000
12,000
16,000
20,000
24,000
28,000
Dry/Susp.
Gas
Oil
1990’s Avg = 10,000 Wells
2000’s Avg = 19,800 Wells
Forecast2005 = 23,000
Canada’s Natural Gas in the Integrated North American
Market
Canadian and U.S. Natural Gas Pipelines
TransCanada TransmissionMainline
TQ&M
Westcoast
KernRiver
NorthwestNorthernBorder
TransCanada Alberta (NGTL)
NGPL
ANR
ANREl Paso
PG&E
SoCal
PGT
TexasEastern
Panhandle
Algonquin
Transcontinental
ANG/Foothills
NGPL
Northwest Foothills
El Paso
Transwestern
Trailblazer
M&NE
CNG
Iroquois PNGTS
Alliance
LakesGreat
Western Canadian Gas ResourcesConventional and New Sources
Northern Canada, 70 Tcf
Coalbed Methane, 167 Tcf
WCSB Conventional
Gas Resources REMAINING,
144 Tcf
WCSB Conventional
Gas - PRODUCED to date, 146 Tcf
Source: Alberta Energy & Utilities Board/National Energy Board, CERI
Western Canada Natural Gas Production
14
15
16
17
18
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
bill
ion c
ubic
feet
per
day
Source: FirstEnergy Capital
2003
20042005
Production increased by more than 200 mmcf/d in the first quarter 2005 over last year
2000 2001 2002
<30 mmcf/d
30-50 mmcf/d
>50 mmcf/d
2003
Top Natural Gas Wells Drilled2000 - 2003
Talisman Monkman:Dec 2004: 66 mmcf/d
Shell/Mancal Tay River:Dec 2004: 30 mmcf/d test
Sources: First Energy, Talisman, Shell
0
3
6
9
12
15
18
bill
ion
cu
bic
fe
et
pe
r d
ay
1970 72 74 76 78 80 82 84 86 88 90 92 94 96 98 2000 '02 '04E
Exports to U.S.
Canadian Demand
Canadian Natural GasCanadian Demand and Exports to US
Source: CAPP Statistical Handbook
Canadian Natural Gas Productive Capacity – CERI Alternate Case
Source: Canadian Energy Research Institute
0
1
2
3
4
5
6
7
8
9
10
2002 2005 2008 2011 2014 2017 2020
Pro
duct
ive
capac
ity
(Tcf
per
yea
r)
BC Offshore
Nova Scotia
Natural gas from
coal/CBM
North
Newfoundland
Western CanadaSedimentary Basin
CanadianCrude Oil and Oil Sands
Global Crude Oil Reserves by Country
Source: Oil & Gas Journal Dec. 2004
223539
6077
9299
115126
179
259
0
50
100
150
200
250
300
SaudiArabia
Canada Iran Iraq Kuwait Abu Dhabi Venezuela Russia Libya Nigeria UnitedStates
billion b
arre
ls
Includes 1
75 billion barre
ls
of oil s
ands rese
rves
Canada, with 175 billion barrels in Oil Sands reserves, ranks 2nd only to Saudi Arabia in global oil reserves
Oil Sands Projects in Three Deposits
• Oil sands production now exceeds one million barrels per day
• US$28 billion built from 1996-2004
• Close to US$36 billion in new oil sands projects expected in 2005-2010
Peace River
Athabasca
ColdLake
Edmonton
Calgary
Ft. McMurray
Value Creation(CNRL)
Deer Creek
SyncrudeSuncor
Petro-Cda
Shell
Encana
Encana
Petro-Cda
Suncor
Imperial
ExxonMobil
Devon
True North
Encana
Bristol(CNRL)
Cdn Coastal(Devon)
Synenco
Husky
LEGEND
Denotes SURFACE
MINEABLEAREA
Fort McMurray
Shell
CNRL
Centennial(Conoco) Imperial
Syncrude EM
Oil Sands Production Technologies
Oil ProductionSAGD Process
Steam Injection
ReservoirOil Production
SteamChamber
Steam Injection
Source: PetroCanada
Mining & Upgrading In-situ
Oil Sands Production now exceeds 1 million barrels per day
Recoverable resource – 65 billion barrels Recoverable resource – 250 billion barrels
Oil Sands Production – Mining and UpgradingVideo – Courtesy of Shell Canada Ltd.
0 5 10 15 20 25
Cold Production
Mining
SAGD
Cyclic Steam
Integrated SCO*
US$/barrel
Oil Sands Supply Costs by Recovery Type
Source: NEB. Based on C$2003 converted @ US$0.80/C$.
* Surface mining, extraction & upgrading
Light Oil
Heavy Oil
Canadian Oil ProductionConventional, Oil Sands and Offshore
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
thousa
nd b
arr
els
per
day
1980 1985 1990 1995 2000 2005 2010 2015
WCSB Conventional Oil
Oil Sands
Offshore
Source: CAPP
Actual Forecast
Oil Sands Growth: 2004 = 1 million b/d2015 = 2.7 million b/d
Natural Gas Use in Oil Sands DecliningNatural Gas Consumed per Barrel of Oil Sands Production
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
1994 - 1997 1998 - 2000 2001 -2003 NewTechnologies
thousa
nd c
ubic
fee
t per
bar
rel
Source: Historical data from EUB
Oil Sands Production TechnologiesAlternatives to Natural Gas
Toe-to-Heel Air Injection – Whitesands Project OrCrude Process - Nexen/OPTI Longlake
Multiphase Superfine Atomized Residue - DeerCreekSuncor 3rd Upgrader - Coke Gasification
OXYGEN WASTE WATER PETROLEUM COKE
SYNTHETIC GAS
(CO, H2, CO2)
GASIFIER
CO2 CAPTURE &SEQUESTER
HYDROGEN
HYDROTREATORSBOILERS
STEAM & ELECTRICITY
FUEL
Canadian and U.S. Crude Oil Pipelines
Mexico
ReginaCromer
Enbridge (NW )Enbridge (NW )
Norman Wells
EnbridgeEnbridge
LakeheadLakehead
PlattePlatte
CaplineCapline
Trans Mountain
Trans Mountain
PlainsPlains
TexacoTexaco
ButteButte
ShellShellKochKoch
EnbridgeEnbridge
Rocky Mtn.Rocky Mtn.
BPBP
RangelandRangeland
ExpressExpress PortlandPortland
WinkWink
Chicago
St. James
Wood River
Hardisty
Sarnia
Burnaby
Cutbank
Patoka
GretnaMontreal
Portland
Salt Lake City
CushingCushing
Guernsey
Midland
Los Angeles
Houston
Clearbrook
Anacortes
Mandan
Minneapolis
ShellShell
Zama
Edmonton
Billings
Canada is already well connected by pipeline to oil markets in Canada and the United States.
Canadian and U.S. Crude Oil Pipeline Alternatives
Sarnia
Fort McMurray
Chicago
Houston
Los Angeles
Patoka
Montreal
Burnaby
St. James
PortlandSalt Lake City
Superior
Hardisty
Edmonton
Anacortes
San Francisco
Casper
PotentialPipeline Expansion
Routes
• Asia• California
• Anacortes
California
USGC
ENBRIDGE GATEWAY
TCPL KEYSTONE
WoodRiver
Cushing
Spea
rhea
d
Extensions toNew Markets
Growing oil sands production will require new pipeline capacity to existing and expanded markets
Midwest
Potential Tanker Markets for Canadian Oil Sands Production
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: Enbridge Pipelines