Canada

Oil-Sands Operators Bet on Local Advantage as U.S. Partners Flee

21 Apr 2017   Canada, Tar Sands

Now that multinational energy producers have sold their stakes in Canada’s oil sands, local companies are hatching plans to make some real changes.  Cenovus Energy Inc. and Canadian Natural Resources Ltd. are betting they can exploit new technologies and their deeper understanding of Canadian-specific issues, such as environmental rules and relations with native communities, to profit from one of the world’s biggest hydrocarbon reserves without their former partners.  “The oil sands require a focus on environmental issues like carbon pricing, indigenous issues, things like that, that are very specific kinds of skills that companies need to have for Alberta, for Canada,” said Harrie Vredenburg, a professor at the University of Calgary’s Haskayne School of Business. “Some of the multinationals are not necessarily particularly suited to that. In all those things, it does favor the Canadian firms.”

China talks clean energy with Canada

20 Apr 2017   Canada, China

Chinese officials discussed clean energy during talks with the Canadian prime minister as both economies look to diversify their energy sectors. File photo by Stephen Shaver/UPI April 19 (UPI) — Clean energy and technologies related to the fight against climate change are some of the ways to foster trade with Canada, the Chinese premier said. Canadian Prime Minister Justin Trudeau spoke by phone late Tuesday with his Chinese counterpart, Li Keqiang. A readout of the meeting from the official Xinhua News Agency stated that both sides discussed bilateral opportunities in energy. The two leaders expressed willingness to expand bilateral trade and investments, the official newspaper reported. “The two countries should also strengthen cooperation on tackling climate change and cooperate in new areas such as clean energy to create new growth points in the relationship,” Li said. Many of the export metrics trended lower for Canada in 2015 and unemployment […]

Canada pipeline development facing headwinds

20 Apr 2017   Canada, Pipelines

Delays in implementation and concerns about North American trade policies create uncertainty for the western Canadian pipeline development, analysis found. A survey from IHS Markit of the pending or proposed pipeline networks in Canada, including Keystone XL , found the review process takes more than five years on average per project. Those time delays, along with U.S. President Donald Trump ‘s pledge to reconfigure regional trade policies, leaves parts of the Canadian energy market in limbo, the report found. “Lessons from the timing of Keystone XL and concerns over a possible resurgence of U.S. protectionism have highlighted the importance of market diversification,” it said. Canada is the No. 1 oil exporter to the United States and remains relatively landlocked […]

What Does The Future Hold For Canada’s Oil Sands?

20 Apr 2017   Canada, Tar Sands

Phases in Canada’s Oil Sands We have entered a unique phase in major oil sands acquisitions in Alberta. Canadian companies are using their operational expertise, large market values, and stable balance sheets to build up larger positions in Canada’s oil sands. Over the last decade, oil production from Canada’s oil sands has increased 100 percent and an increasing number of players are participating in that growth. In 2006 there were 6 companies, not including the Syncrude Canada consortium, that controlled all oil sands production in Alberta. Now, there are around 20 oil sands producers. (Click to enlarge) Over the years, key acquisitions took place in Canada’s oil sands that helped grow the resource to what it is now: 1. The first phase was from 2006 to 2010 when oil companies were acquiring undeveloped assets to secure a position in developing Canada’s oil sands. Examples include Statoil’s $2.2 billion acquisition […]

Oil Servicers Still Struggle as Canadian Producers Ramp Up

18 Apr 2017   Canada

Only 34% of servicing businesses have no risk of insolvency Moody’s says Calfrac will likely need to restructure debt The worst may not be over for everyone in Canada’s oil patch even as crude prices show signs of stability. While producers are on firmer footing, oilfield service companies are still keeping restructuring advisers and lawyers busy as the effects of nearly three years of depressed oil prices continue to roll through one of Canada’s most important industries. About 48 percent of Canada’s publicly traded oil, gas and consumable fuels companies aren’t in any danger of insolvency, whereas only 34 percent of energy equipment and services companies are in the clear, according to data analyzed by PwC. “The big oil producers have seen the worst; it’s the continued fallout that’s causing even more concern,” said Kyle Kashuba , a partner in Torys LLP’s restructuring practice in Calgary. “It’s the ripple […]

Canada Is the G-7’s Surprise Growth Leader, For Now

18 Apr 2017   Canada

Central bank’s latest GDP forecast tops developed-world peers Weak exports, business investment are flies in the ointment Almost out of nowhere, Canada has become one of the fastest growing economies in the developed world. The oil-producing nation, which struggled mightily with falling crude prices the past two years, grew at an annualized pace of almost 4 percent in the first quarter, according to the Bank of Canada’s latest estimates. No other Group of Seven economy even came close. For all 2017, the central bank is projecting 2.6 percent growth — which would put the economy at the top of the rich-country growth scale. Yet even with the economy suddenly running hot, caution prevails . The Canadian dollar has had a middling performance despite the strong economic numbers. At a rate decision last week in Ottawa, Canada’s central bank revised up growth projections for 2017, but cut them for 2018. […]

Canada sees emerging role for wind energy

7 Apr 2017   Canada

With economic diversification on the agenda in Canada, the country’s natural resources minister said this may be the start of the era for wind energy. Wind energy advocates and government officials visited Quebec for a regional energy conference as the North American energy landscape is shifting. Robert Hornung, the president of the Canadian Wind Energy Association, told the audience more of the economic growth needs to be powered by low-carbon sources. “We have the resources and we have the technology,” he said. The Canadian government estimates it has the eighth largest wind-energy portfolio in the world, with nearly 12,000 megawatts of installed capacity. Some provincial governments are taking the initiative on clean energy, which Saskatchewan leading efforts with its […]

Canadian Oil Disruption, OPEC Output Cuts Open Door for Mexico

5 Apr 2017   Canada, Mexico

Canadian crude shipments to the U.S. are poised to shrink just as the effects of OPEC-led output cuts are being felt in the Caribbean. That’s good news for Mexico and other local oil producers. Syncrude Canada Ltd. told customers that they wouldn’t receive any supply in April from its 350,000 barrel-a-day upgrader, according to people familiar with the matter. The plant, which turns bitumen from Alberta’s oil sands into light synthetic crude, moved forward maintenance following a fire last month. Light crude and condensate jumped to the highest level in more than a year last week, and Western Canadian Select on Monday was the strongest since June 2015, when wildfires disrupted oil sands production. The loss of some Canadian shipments comes just as U.S. refiners are returning from seasonal maintenance and shipments from the Middle East are declining. Mexico stands to benefit from the disruption, as higher heavy Canadian […]

Sources: Syncrude Oil Sands Project Cuts April Production to Zero

4 Apr 2017   Canada, Tar Sands

The Syncrude oil sands project in northern Alberta has cut its production to zero for all of April following a fire last month, three market sources said on Monday. Syncrude, which is majority-owned by Suncor Energy, previously said shipments of synthetic crude were expected to restart at up to 50 percent of the plant’s 350,000 barrel-per-day capacity in mid-April. (Reporting by Nia Williams and Catherine Ngai)

New fire protection measure in force in oil-rich Alberta

1 Apr 2017   Canada, Tar Sands

After wildfires last year hobbled Alberta’s oil sector, the provincial government said Friday marks the start of enforcement of new protection regulations. Alberta lies at the center of Canada’s oil sector and blazes in and around Fort McMurray last year sidelined about 1 million barrels per day in oil production at its peak. That would represent about a quarter of the total Canadian oil production by today’s standards. Alberta declared March 1 as the official start of wildfire season and Friday marks the first day of enforcement for new protection measures. More than 235 square miles of land were scorched by wildfires last year. “Last fall, we passed important legislation to help deter unsafe behavior and […]

Deal Of The Month: ConocoPhillips Cashes In With $13.3 Billion Sale

1 Apr 2017   Canada, Tar Sands

Selling most of its Canadian oil sands assets to Cenovus, ConocoPhillips exceeds divestment target and is positioned to achieve more than $16 billion in asset sales by the end of the year. Quicker than you can say “Fossil Creek Christina Lake,” ConocoPhillips has erased many balance sheet concerns and exceeded its plan to sell off up to $8 billion in non-core assets . As the end of March neared, ConocoPhillips (NYSE: COP) announced it will sell its 50 percent ownership interest in the Fossil Creek Christina Lake (FCCL) joint venture to its partner there, Canada’s Cenovus. COP also sold off most of its Western Canada Deep Basin gas assets. The deal value? Including a cash payment of $10.6 billion and contingency payments, it’s worth a cool $13.3 billion. (That’s $17.7 billion in Canadian cash.) The Christina Lake project uses steam-assisted gravity drainage (SAGD) to drill wells, inject steam at […]

Environmentalists need to “end the charade” against oil sands

31 Mar 2017   Canada, Tar Sands

According to the Canada West Foundation, keeping the oil sands in the ground and stopping new pipelines “will actually increase greenhouse gas emissions” – wait, what? At an energy conference deep in American oil country earlier this month, Prime Minister Justin Trudeau received an award for his global energy and environmental leadership. “No country would find 173 billion barrels of oil in the ground and just leave them there,” he told oil and gas execs. “Our job is to ensure that this is done responsibly, safely and sustainably.” One environmental group called the award a middle finger to the entire premise of environmental leadership. But Calgary-based think tank the Canada West Foundation says it’s time environmentalists “end the charade.” Keeping the oil sands in the ground and stopping new pipelines “will actually increase greenhouse gas emissions,” argues the foundation’s newly-minted CEO, former Liberal leadership candidate Martha Hall Findlay, in […]

Enbridge Cuts 1,000 Jobs Following Takeover of Spectra in U.S.

23 Mar 2017   Canada

Enbridge Inc. will cut 1,000 positions to reduce overlap after the Canadian pipeline giant completed its purchase of Spectra Energy Corp. in the U.S. last month. “These workforce reductions are only one component of the synergies we expect to achieve over the coming months as we fully integrate our companies,” Todd Nogier, a spokesman for the company, said in an email. The world’s biggest pipeline company by market value finalized a $28 billion takeover of Spectra on Feb. 27 as so-called midstream companies turn to consolidation to secure future growth amid opposition to new projects. Similarly, competitor TransCanada Corp. agreed to buy Columbia Pipeline Group Inc. to set up an oil and gas transportation empire spanning from Canada to Mexico. The cuts follow the elimination of 530 positions announced in October after an organizational review. Those cuts weren’t related to the Spectra acquisition, Enbridge said at the time. Enbridge […]

Why Shell’s Oil Sands Sell Off Is Great News For Canadian Oil

22 Mar 2017   Canada, Tar Sands

There was a time when if a Canadian exploration and production (E&P) company bought out a foreign-controlled competitor, it was not only good for the country but financially beneficial because it qualified for government incentives. That Canada’s E&P industry was in the hands of too many foreign operators was regarded as a big problem in the National Energy Program of 1980. Patriating this key industry became a priority if not an obsession. Thirty-seven years later, this is clearly not an issue. However, industry watchers must reflect upon the multitude of responses to the announcement by Canadian Natural Resources Limited (CNRL) it was purchasing effectively all (except 10 percent of Athabasca Oil Sands Project or ASOP) of the oil sands production operations and leases held by the Shell Canada affiliates – Shell Canada Energy, Shell Canada Limited and Shell Canada Resources (Shell) for cash and shares totaling $11.1 billion. The […]

Plenty of Cash Lies Buried on Canada’s Oil Sands

21 Mar 2017   Canada, Tar Sands

Earlier this month, Marathon Oil agreed to spend more than $1 billion on acreage in the Permian Basin, the very hottest place on the planet to drill for oil. On the same day, it announced the sale of other properties 2,000 miles due north in Canada’s oil sands, a significantly less popular place to invest right now. Shareholders applauded, sending Marathon’s shares up 8% on the news, but the price of the company buying its unwanted…

Canada Oil Dependence on U.S. Loosens in Age of Donald Trump

11 Mar 2017   Canada

The Canadian oil patch’s half-century bond to the U.S. market is loosening one tanker load at a time in Donald Trump’s “America First” era. Last month, a ship loaded oil off Newfoundland and set sail on a 10,000-plus nautical mile, or 18,500 kilometer, journey to China, following on the heels of an oil-sands cargo shipped from the U.S. Gulf Coast. India-based Reliance Industries Ltd . is set to receive the first shipment of heavy Canadian crude in April, a person familiar with the orders said last month. For a country that sent about 99 percent of its crude exports to the U.S. last year, the recent flow to Asia is a welcome sign of diversification to many Canadian producers and political leaders. While the shipments represent baby steps in efforts to wean Canada off the almost exclusive dependence on the juggernaut to the south, they are part of a […]

Majors exiting Canada’s oil sands acting in own interest: Trudeau

11 Mar 2017   Canada

Canadian Prime Minister Justin Trudeau on Friday dismissed a recent string of major oil companies selling their holdings in the heavy oil sands of Western Canada and moving investments to shale fields. Royal Dutch Shell ( RDSa.L ) and Marathon Oil ( MRO.N ) this week disclosed sales of operations that largely removed both firms from the carbon-heavy oil reserves. Shell is selling its interests to Canadian Natural Resources( CNQ.TO ). Last month, Exxon Mobil ( XOM.N ) wrote down all of its oil reserves from its Kearl project in northern Alberta, saying extracting the oil was no longer economic at current prices. “Businesses will make the decisions they make,” Trudeau said. In a wide-ranging media briefing, Trudeau said oil and gas executives are looking for greater clarity […]

Trudeau Walks a Thin Tightrope Between Fossil Fuels, Renewables

10 Mar 2017   Canada

Under Prime Minister Justin Trudeau, Canada’s government is playing both sides of the fence in its national energy strategy. During Trudeau’s first 16 months, three energy projects — a pipeline and two export terminals — were approved by the government with the aim of helping drillers ship their products abroad from the resource-rich West Coast, a boost to the country’s economy. At the same time, he has consistently expressed his support for development of renewable energies, becoming a forceful voice in the campaign against climate change at a time when U.S. support is waning. “When we go camping, we light our fires before the sun goes down. And that doesn’t mean we’re anti-daylight,” Trudeau said Thursday at CERAWeek by IHS Markit , the Houston energy meeting that annually draws executives from around the world. “It’s exactly the same with energy. Innovating and pursuing renewables isn’t somehow in competition with […]

Canadian Oil Gets More Canadian as Internationals Pull Back

10 Mar 2017   Canada

The Syncrude Canada Ltd. oil sands upgrading plant near Fort McMurray, Alberta, Canada, on June 4, 2015. The future of the Canadian oil sands is looking a lot more Canadian. Calgary-based Canadian Natural Resources Ltd. said Thursday it will spend C$12.7 billion ($9.4 billion), its biggest purchase ever, to buy Alberta oil fields and facilities that process the sticky bitumen from oil sands from Royal Dutch Shell Plc and Marathon Oil Corp. “At the time you see some of the majors pivoting to other assets, you see Canadian companies that are doubling down on the oil sands,” Kevin Birn, a director at IHS Energy in Calgary, said by phone Thursday. The deals come as West Texas Intermediate, the benchmark U.S. crude, falls below $50 a barrel. It’s also less than a month after two major U.S. producers had to remove billions of barrels of Canadian oil from their stated […]

Shell Becomes Gas Company With $7.25 Billion Oil-Sands Sale

Shell remaking itself for low-carbon world, but some want more Royal Dutch Shell Plc just took a big step toward remaking itself as a natural gas company. With Thursday’s deal to sell $7.25 billion of Canadian oil-sands assets, Shell will boost the share of cleaner-burning gas in its proven reserves from about half to 60 percent, Shell data show. It will also rid itself of some of the most polluting assets on its books. Chief Executive Officer Ben Van Beurden is reshaping Europe’s biggest oil company not just to survive lower crude prices but also to endure the transition to a low-carbon world. His record acquisition of BG Group Plc has given him gas deposits from Kazakhstan to Australia. On Thursday he sharpened Shell’s commitment to reducing pollution, changing executive pay policy to reward efforts to control it. The oil-sands divestment is a big step in “transforming the company […]

Shell agrees $7.25 billion Canadian oil sands sale

9 Mar 2017   Canada, Tar Sands

Royal Dutch Shell has agreed to sell most of its Canadian oil sands assets for $7.25 billion to Canadian Natural, the company said on Thursday. The deal also includes a joint acquisition by Shell and Canadian Natural of Marathon Oil Canada Corporation, a subsidiary of Marathon Oil, for $1.25 billion each to be paid in cash, Shell said. Shell will sell its existing and undeveloped Canadian oil sands interests and reduce its share in the Athabasca Oil Sands Project (AOSP) to 10 percent, but it will remain as operator of the AOSP Scotford upgrader and the Quest carbon capture and storage project. (Reporting by Karolin Schaps; editing by Jason Neely)

Shell Cuts Debt With $7.25 Billion Sale of Canada Oil Sands

9 Mar 2017   Canada, Tar Sands

Royal Dutch Shell Plc will sell almost all of its production assets in Canada’s oil sands in a $7.25 billion deal that cuts debt and reduces involvement in one of the most environmentally damaging forms of fossil-fuel extraction. All of the company’s oil-sands interests apart from a 10 percent stake in the Athabasca mining project will be sold to Canadian Natural Resources Ltd., Shell said Thursday. The Hague-based company will continue as operator of the Scotford upgrader, which converts heavy oil to lighter liquids for easier transport, and the Quest carbon capture and storage project. The Anglo-Dutch producer is almost two-thirds of the way through a $30 billion divestment program to reduce debt, which soared following its biggest-ever acquisition of BG Group Plc last year. The company this week ended an almost two-decade old U.S. refining partnership with with Saudi Arabian Oil Co. and earlier this year sold a […]

Did This Geologist Just Pinpoint This Decade’s Biggest Natural Gas Discovery?

7 Mar 2017   Canada

Nearly a decade ago, I got interested in finding oil and gas fields from space. That odd-sounding strategy came to me while I was living in Canada’s petro-center, Calgary. And met a group of explorationists working with PhD experts in satellite imaging. Skitterphoto / Pixabay I was fascinated when this team explained how they could filter remote sensing data from proprietary satellites to spot minute amounts of hydrocarbons leaking from the Earth’s surface. Using this cheap and easy data to determine where big oil and pools were located at depth — and where we should be drilling exploration wells. As it turned out, that group had mixed success. Obtaining satellite data wasn’t always easy — and filtering it to ensure we were looking at real anomalies was a sensitive business. Since then, I’ve been a little skeptical when people proposed satellite imaging exploration strategies. Although there was enough to […]

Shell Shuns New Oil-Sands Projects as Low Prices Force Cost Control

28 Feb 2017   Canada, Tar Sands

Royal Dutch Shell Plc is unlikely to take on new oil-sands projects as it maintains a grip on costs after crude’s crash forced competitors to write down Canadian reserves. While Shell’s existing oil-sands operations generate strong cash flows, the expense of developing new projects discourages additional investments, Chief Executive Officer Ben Van Beurden said in an interview. Oil sands, the reserves of heavy crude found primarily in northern Alberta, lured investors in the past decade as oil’s surge above $100 a barrel made the difficult extraction process economic. But they’ve fallen out of favor following the subsequent market collapse as companies dump expensive projects amid fears that competition from low-cost crude could strand costlier assets. “All of those are reasons we are unlikely to develop new oil-sands projects,” Van Beurden said in London. “There are no plans for growth capital to be invested in oil sands.” Exxon Mobil Corp. […]

A cornerstone of global oil supply — Canada at a cross roads

28 Feb 2017   Canada

Canadian heavy crude is a cornerstone of global oil supply now and into the next decade. But growth is likely to be increasingly affected by investor sentiment soured by environmental concerns and competition for capital from tight oil. Both factors have already begun to reshape the domestic corporate landscape. How many oil producing countries can predict with some confidence that they can increase output over the next decade? Outside OPEC, we reckon the answer is just three, a fraction of the thirty or more non-OPEC countries that will contribute 53 million b/d to global oil supply this year. Those three power houses are: USA, driven by tight oil; Brazil, by the giant deep water pre-salt fields of the Santos basin; and Canada, by the extra-heavy crude of its Albertan oil sands. Canada is already the third largest non-OPEC producer (behind the US and Russia) with 4.4 million b/d, and […]

Have The Majors Given Up On Canada’s Oil Sands

27 Feb 2017   Canada, Tar Sands

Canada’s oil sands could struggle to rebound, with potentially billions of barrels of oil being kept underground permanently. Canada’s oil sands are incredibly expensive, some of the costliest sources of oil in the world. Unlike conventional oil drilling, or even drilling in shale, producing from oil sands is more like open-pit mining in many cases. The oil, often found as a sticky, viscous semi-solid known as bitumen, requires extra steps to extract and process before it can be shipped. That stands in stark contrast to conventional oil, which merely requires drilling into an oil field and pumping out the crude. As a result, the breakeven cost for Canada’s oil sands is dramatically higher than most other places in the world. Obviously, costs vary from company to company and project to project, but a 2016 estimate from IHS put the average breakeven price at a new greenfield oil sands mine […]

Economy in oil-rich Alberta turning corner

25 Feb 2017   Canada

Reconstruction in the wake of wildfires that idled parts of its oil industry and improved energy economics means Alberta is growing, a minister said. “Alberta’s economy is forecast to return to growth in 2017, following a prolonged downturn due to the oil price shock,” Finance Minister Joe Ceci said in a statement . At one point last year, the oil-rich province was anticipating an $8 billion deficit and lingering recession because of the downturn in crude oil prices and May wildfires in the Fort McMurray area that idled about 1 million barrels per day worth of regional oil production. Turning the corner on reconstruction efforts, the provincial government said it was advancing $15.2 million in funding to support developing in […]

Canada Stocks Tumble as Trump Trade Concerns Spread, Oil Falls

25 Feb 2017   Canada

Canadian stocks plunged the most in five months as earnings and dividend disappointments among gold companies, along with weakening oil prices and trepidation over President Donald Trump’s border tax proposals, erased two-thirds of this year’s rally. The S&P/TSX Composite Index fell 1.7 percent to 15,521.39 at 2:36 p.m. in New York. All 11 major industry groups were lower, led by energy shares, whose decline extended their 2017 loss past 7 percent. Car components maker Magna International slipped 5.4 percent after saying protectionism and U.S. measures that impede free trade may have a material adverse effect on its operations. Gold stocks were among the weakest on the S&P TSX, with Torex Gold Resources falling almost 10 percent after being downgraded to hold at Toronto Dominion. Eldorado Gold decreased 8.7 percent following an unexpected fourth-quarter loss. Nevsun Resources, which cut its dividend by 75 percent to 1 cent, slid 8.6 percent […]

Canada’s Fading Oil Promise Leaves U.S. Majors Struggling

24 Feb 2017   Canada

Oil-sands investments in Western Canada that gobbled tens of billions of dollars over the past decade are proving an Achilles heel for some of the world’s biggest energy producers. Exxon Mobil Corp. slashed proved reserves the most in its modern history after removing the entire $16 billion, 3.5-billion-barrel Kearl oil-sands project from its books on Wednesday. That followed ConocoPhillips ’ announcement a day earlier that erased 1.15 billion oil-sands barrels, plunging its reserves to a 15-year low. While prolific shale plays in Texas and Oklahoma are going through an investment boom with oil above $50 a barrel, the oil sands have fallen out of favor. Current investments in the region amount mostly to long-planned expansions by large Canadian producers like Suncor Energy Inc. , while majors like Statoil ASA have sold assets. Suncor, which took over Canadian Oil Sands Ltd. less than a year ago, is down more than […]

Canada closer to breaking oil landlock

14 Feb 2017   Canada

A review board in Canada said it started a detailed approval process for the route of the expanded Trans Mountain pipeline to the western shore. The National Energy Board said it approved a proposed draft for the detailed route of the Trans Mountain pipeline. The regulator said pipeline company Kinder Morgan must now submit actual plans for each segment of the detailed route and notify any landowners whose property would be crossed. “Trans Mountain must also publish notices in local newspapers along the pipeline route,” the NEB said in a statement . Kinder Morgan would nearly triple […]

Arctic Oil Town Fears Future as Imperial’s 1920s Wells Shut

10 Feb 2017   Canada

When oil topped $100 a barrel three years ago, the tiny village of Norman Wells in Canada’s high arctic was gearing up to be the “Dubai of the Mackenzie River,” with oil revenue bringing prosperity to all. Now, with oil at half that price and one of Canada’s oldest wells set to close, the future is less certain for the 750 residents in the Northwest Territories town. Imperial Oil Ltd. , the Canadian unit of Exxon Mobil Corp., will probably shut in the wells this month, ending almost a century of production in the area about 1,700 kilometers (1,000 miles) north of the Calgary energy hub. Production is being halted after the lone Enbridge Inc. pipeline that carries oil south from Norman Wells was brought down late last year, Lisa Schmidt, an Imperial Oil spokeswoman, said by phone. Schmidt declined to say if production will resume. The town that […]

Reduced US crude exports to Canada drag December total lower

9 Feb 2017   Canada, USA

US crude exports fell by 156,000 b/d in December, to 442,000 b/d, after exports into Eastern Canada dried up, a S&P Global Platts analysis of US Census Bureau data released Tuesday showed. US crude exports to Canada declined by 155,000 b/d, to 196,000 b/d, as flows from New York and Maine dropped to zero after averaging 187,000 b/d in October and 25,000 b/d in November. Crude exports from New York into Canada averaged 137,000 b/d over 2016 and are most likely rail shipments of Bakken crude. Statistics Canada data confirms that Canada slashed its US crude imports in December, bringing in more Nigerian, Algerian and Saudi Arabian cargoes, while total imports were down by 145,000 b/d at 593,000 b/d. The Statistics Canada data shows that New Brunswick imports from the US fell to zero in December, with the province’s US imports averaging 35,000 b/d in 2016 and shipments arriving […]

Suncor Output Hits Record With Oil-Sands Unit at Full Speed

9 Feb 2017   Canada, Tar Sands

Suncor Energy Inc.’s production rose to a record last quarter after the oil-sands giant took control of the Syncrude processing unit and put it at full throttle. Canada’s biggest energy company produced 738,500 barrels of oil equivalent a day in the period, up from 582,900 in the previous quarter, according to an earnings report Wednesday. The jump was largely due to its increased stake in the Syncrude upgrader, which processes bitumen mined in northern Alberta into light crude, and to boosting the utilization of the unit to 102 percent of nominal capacity, from 73 percent a year earlier. Suncor has slashed costs to weather the industry downturn and is now benefiting from a 76 percent rebound in oil prices over the past year as the Organization of Petroleum Exporting Countries and other major exporters curtail production. The company’s output has risen after it completed the acquisition of Canadian Oil […]

From Bust To Boom: Why Canada’s Rig Count Increased 50 Percent Last Year

9 Feb 2017   Canada

Canadian rigs are going back to the field, coaxed by higher commodity prices and greater productivity. Across the land, 345 iron masts were turning bits last week, so the year-over-year rig count is up by almost 50 percent. But where are they drilling? The pickup has been seen mainly in Alberta, somewhat in Saskatchewan and not so much in British Columbia. (Click to enlarge) The Western Canadian Sedimentary Basin (WCSB) blankets an area twice the size of Texas and mostly underlays British Colombia, Saskatchewan and Alberta. More like a rumpled blanket, the rocks underneath the WCSB hide all sorts of hydrocarbons, from natural gas, to condensates, to light oils through the heaviest, most viscous energy commodities. BC has mostly natural gas. Saskatchewan has mostly oil. Sandwiched between, Alberta has a smorgasbord of everything, including the contentious oil sands, which is a separate category of resource development. Depending on commodity […]

The Canadian Comeback: Oil Rig Productivity Takes A Huge Leap

2 Feb 2017   Canada

How much wood could a woodchuck chuck? Okay, that’s trite, but assuming a woodchuck can chuck wood, the classic children’s alliteration leads economists to think about productivity, poetically. Now I don’t know much about forestry or zoology, or even poetry for that matter. But in the energy business the lyrics might go something like, “How much oil could an oil rig rig?” I think we can agree my poetry doesn’t work. But bear with me, because I’m exploring how fast Canada’s oil business is innovating, especially relative to its US peers. Really, my question is, “How much new oil production can come from one drilling rig, working over the span of one month?” And related to that, “How is the ability to get oil out of the ground improving over time, here in Canada versus the US?” The measurement is called rig productivity. Superior rig productivity translates into being […]

Statoil completes sale of Alberta oil sands

2 Feb 2017   Canada, Tar Sands

Norwegian energy major Statoil said it closed on the sale of its entire oil sands operations in the oil-rich Canadian province of Alberta. Statoil said it completed the sale of its oil sands division to Athabasca Oil Corp. “Statoil has received $329 million in cash, following customary closing adjustments, plus 100 million common shares in Athabasca, representing just below 20 percent of the equity in the company,” the company stated. The cash deal extends to the Leismer thermal oil project in Alberta, which was producing about 24,000 barrels of oil per day when the deal was announced last year. Athabasca said the deal gives it a stronger base of production of around 40,000 barrels of oil equivalent estimated for 2017. Both companies said the project […]

Canada Energy East pipeline review to restart under current regulator

28 Jan 2017   Canada

A review of TransCanada Corp’s proposed Energy East pipeline will start again from the beginning, Canada’s National Energy Board (NEB) regulator said on Friday, voiding all decisions from the project’s previous examining panel that has been accused of bias. The new review will be conducted by the NEB in its current form, said the Natural Resources Canada federal agency, despite the ongoing reform of the energy regulator. Last year, the review stalled amid protests by environmentalists and after the resignation of the examining panel due to revelations that members met privately with a TransCanada consultant. Cabinet ministers were upset by the incident and the government may eventually curb the NEB’s power, sources have said. The move to restart the review would appear to spare the […]

Regulator Voids TransCanada Energy East Project Decisions

28 Jan 2017   Canada

Canada’s lead pipeline regulator has voided past decisions on TransCanada Corp. ’s application for its proposed Energy East pipeline, forcing the company to start the hearing process from the beginning shortly after competing pipeline projects have been approved. The National Energy Board’s decision was made by a new hearing panel that was appointed earlier this month. That panel replaced an earlier panel that stepped down in September amid accusations of bias. Past decisions regarding the proposed Eastern Mainline gas pipeline project were also voided. While TransCanada won’t have to submit new applications, once the panel determines that the existing applications are complete, a 21-month time limit for hearings will reset. The decision is a setback for the $15.7 billion ($11.2 billion) Energy East project, which involves building a 4,500 kilometer crude pipeline from the oil fields of Alberta to refineries in Eastern Canada and a marine terminal in New […]

Trump’s 20% Import Tax May Be Another Gift for Canadian Oil

27 Jan 2017   Canada

Wall Dispute ‘Politically Explosive’ for Mexico U.S. President Donald Trump’s controversial 20 percent tax on imports from Mexico to pay for a border wall would come as a second gift in less than a week for Canada’s oil patch. The tax, which White House press secretary Sean Spicer characterized as “theoretical,” would apply to countries “like Mexico,” with which the U.S. has a trade deficit, he said in a briefing Thursday. That would seemingly exempt Canada. The U.S. ran a surplus of $11.9 billion with the northern neighbor in 2015. This would potentially be a boon for Canadian oil sands producers whose heavy crude competes with Mexican supplies in the U.S. refining market. The proposed tax comes three days after President Trump revived the proposed TransCanada Corp.’s Keystone XL project to build a new crude pipeline from Western Canada to […]

For Justin Trudeau, Canada’s Leader, Revival of Keystone XL Upsets a Balancing Act

26 Jan 2017   Canada, Climate, Tar Sands

If there is such a thing as unwelcome good news, President Trump may have handed some to Prime Minister Justin Trudeau of Canada on Tuesday when he revived a cross-border oil pipeline project . The move is likely to complicate a delicate balancing act Mr. Trudeau has been trying to keep up: He has long maintained that Canada needs to develop its energy industry, but he also stands for aggressively cutting the country’s carbon emissions.

Canada May Face Era of Pipeline Abundance After Keystone Move

25 Jan 2017   Canada, Pipelines

President Donald Trump’s decision to revive TransCanada Corp.’ s Keystone XL pipeline may herald a new era of pipeline abundance for Canadian oil producers after years of bottlenecks. The U.S. president signed documents to advance the project Tuesday, more than a year after his predecessor Barack Obama rejected it on grounds it would contribute to climate change. The decision follows the Canadian government’s approval in November of Kinder Morgan Inc .’s Trans Mountain line to the Pacific and Enbridge Inc.’ s expansion of Line 3 to the U.S. Midwest. The three lines would add 1.8 million barrels a day of crude export capacity, enough to handle Western Canada’s growing oil production for 20 years, according to National Energy Board projections. That would add more than $4 billion a year to Western Canada’s economy by making the region’s crude more valuable relative to other grades, Tim Pickering, founder and chief […]

Canadian Drillers Brave Deep Freeze as Oil Patch Revives

25 Jan 2017   Canada

In the snowy prairies of Western Canada, not even temperatures below -40 degrees have stopped Stampede Drilling Ltd.’s 60 recently rehired workers from manning the oil-service provider’s rigs after a nine-month dry spell for the business. “Once oil hit $50, everybody started phoning again,” Bill Devins, the drilling company’s 57-year-old owner, said in a phone interview from his office in Estevan, Saskatchewan, a town bordering North Dakota right at the heart of the Bakken shale formation. “We started to have some activity come our way.” From the tight-oil plays of Saskatchewan to the oil sands of northern Alberta, Canada’s energy producers are returning to growth mode after more than two years enduring the worst market rout in decades. They are leaner and more efficient after cutting staff, shelving projects and reducing costs since the downturn. Cheaper crude doesn’t feel so painful any longer. Companies such as MEG Energy Corp. […]

Trump’s Keystone XL Boost Sends Loonie Soaring Against Peers

25 Jan 2017   Canada, Pipelines

Trump Signs Memoranda on Keystone, Dakota Access The Canadian dollar surged after U.S. President Donald Trump moved to advance the construction of the Keystone XL pipeline, which would enable the country to ship more crude oil to the U.S. and buoy growth. The currency rallied as much as 1 percent to C$1.3106 per U.S. dollar, outperforming all of its Group-of-10 peers and extending its advance this year to 2.1 percent. It appreciated for a second day, recovering from a two-week low reached on Friday. The currency was at C$1.3158 per U.S. dollar at 2:22 p.m., close to its 200-day moving average of C$1.3115 in Toronto. Trump’s decision to move forward with the pipeline that would transport Alberta oil sands crude to the U.S. Gulf Coast is a departure from the Obama administration, which rejected the project in 2015. It helped reignite […]

Oil Sands Are An Easy Target But They Are Going Nowhere

24 Jan 2017   Canada, Tar Sands

Canada’s PM Justin Trudeau sparked outrage earlier this month by saying the Alberta oil sands need to be “phased out”. Because the oil sands industry is the third-biggest employer in the province, the outrage is easily explained, even though Trudeau acknowledged that the phase-out wouldn’t happen overnight. The province is estimated to hold the world’s third-largest oil reserves. As several Canadian observers noted in analyses following Trudeau’s controversial statement, the oil sands make the perfect target for environmentalists and liberal politicians. The Globe and Mail’s Gary Mason puts it brilliantly. “The oil sands make an easy target. The aerial shots are ugly. In a perfect world, they wouldn’t exist; it would all be boreal forest. Flyovers would be organized to see marauding herds of caribou instead of eerie images of molasses-like pits of bitumen. In that same utopia, our cars and planes would not be powered by fossil fuels, […]

Canada Needs to Phase Out Oil Sands, Prime Minister Says

14 Jan 2017   Canada, Tar Sands

Canadian Prime Minister Justin Trudeau sparked anger in the oil-rich province of Alberta on Friday for saying Canada needs to phase out the oil sands. Mr. Trudeau told a town-hall meeting in Peterborough, Ontario, that Canada can’t shut down the oil sands immediately but would need to phase it out eventually. The prime minister…

Canadian drillers add most oil rigs in two years: Baker Hughes

14 Jan 2017   Canada

Energy firms in Canada more than doubled the number of rigs drilling for oil this week to the highest level in almost two years as producers returned en masse from Christmas breaks and crude prices remain near 18-month highs. Drillers added 89 oil rigs during the week ended Jan. 13 bringing the total count up to 170, the highest level since February 2015, data from Baker Hughes Inc ( BHI.N ) showed on Friday. That was the biggest weekly increase since drillers added 129 rigs during the week of Jan. 9, 2015. Drillers in Canada, like their counterparts in the United States, slashed the number of rigs operating during most of 2015 and 2016 as energy prices collapsed due to a global glut. Energy firms in both the United […]

As Sun Sets on Canada Energy, Grafton Eyes Renewables

6 Jan 2017   Canada

Grafton Asset Management Inc., a firm that has brought foreign investment into Canada’s oil and gas industry, is looking to add alternative energy to its portfolio for the first time as it positions itself for the decline of fossil fuels. “I’m worried about the future of the industry in general,” Geeta Sankappanavar, president and chief operating officer of the Calgary-based investment firm, said in a phone interview on Tuesday. “It’s going to be a great business for a period of time, but I do look at it as a sun-setting business — one where we’ll see competition and disruption from outside our industry.” Oil and gas companies have had to cut investment and fire workers to weather the worst price crash in a generation. As crude rebounds after the Organization of the Petroleum Exporting Countries and other major exporters pledged to cut output, some producers like Cenovus Energy Inc. […]

Trudeau’s Energy Boss Turns to Electricity After Oil Decisions

28 Dec 2016   Canada

It was a tumultuous autumn for Jim Carr. Canada’s pipeline point man was a key player in decisions by Prime Minister Justin Trudeau’s government to approve a major liquefied natural gas project in September and a pair of crude-oil proposals from Kinder Morgan Inc. and Enbridge Inc. last month, preceded by a string of regulatory and environmental concessions to quell opposition. That cleared the deck for Carr, Canada’s minister of natural resources. Now preparing for President-elect Donald Trump’s administration with Rick Perry as his U.S. counterpart, Carr, 65, is shifting his attention in 2017 to two fresh endeavors: overhauling the country’s National Energy Board and pushing for new transmission lines, potentially funded by both government and pension funds. An advisory panel will submit its recommendations on the NEB in May and the government will then go about rewriting Canada’s environmental review laws for major projects, Carr said. He also […]

U.S., Canadian voices chime in on drilling ban

22 Dec 2016   Arctic, Canada, USA

U.S. and Canadian voices debated the wisdom of the indefinite ban on oil and gas work in some of its territorial waters, the Arctic in particular. As part of a joint move with the Canadian government, outgoing U.S. President Barack Obama used his authority under the Outer Continental Shelf Lands Act to ban oil and gas work in the Chukchi and Beaufort Seas off the coast of Alaska, as well as Atlantic coast areas. Dale Marshall with Environmental Defense Canada said the indefinite ban on Arctic oil and gas in particular was welcome news for a nation looking to strike a balance between coastal resources and aboriginal and environmental concerns. “The Arctic holds a precious, yet sensitive ecosystem that is vital to Indigenous livelihoods and culture in the north,” he said in a statement. “Increasingly, governments need to be taking steps to remove the […]

Statoil Exits Production in Canadian Oil Sands

15 Dec 2016   Canada, Tar Sands

Canadian oil sands, selling off its assets to Athabasca Oil Corp. and taking a loss of at least $500 million. The move ends Statoil’s nearly decadelong foray into oil sands production and comes two years after the company canceled plans to develop a major oil sands project, citing concerns about profitability. It signals the challenges faced by Canada’s oil sands, which are some of the world’s highest-cost and most greenhouse gas intensive sources of crude oil. “This transaction corresponds with Statoil’s strategy of portfolio optimization to enhance financial flexibility and focus capital on core activities globally,” Lars Christian Bacher, the company’s executive vice president for international development and production, said in a statement. Even with a recent uptick […]