Tar Sands

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.”

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 […]

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 […]

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…

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 […]

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. […]

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 […]

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

10 Feb 2017   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 […]

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 […]

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 […]

Leaner and Meaner After The Crash, Oil Sands Industry Expands

27 Jan 2017   Tar Sands

This time last year, businesses operating in the oil sands of Alberta seemed pretty much done for. Canadian crude sold for less than US$20, and there was no chance of higher prices as OPEC had dug its heels in, pumping ever-increasing amounts of crude, and environmental opposition towards the industry kept growing and getting louder. A year later, those that made it through the worst of the price crisis are leaner due to heavy cost cuts, and also meaner, capable of adapting to a consistently lower price environment. Ironically, they have OPEC to thank. The cartel, which seemed determined to drown shale boomers and oil sands producers along with them in cheap oil, eventually discovered that it would suffer as well, and may possibly suffer to a greater extent than its target, so it struck a production cut agreement that pushed prices up above US$50 a barrel. At US$50 […]

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.

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…

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 […]

Canada Oil Sands in Race With Shale, Batteries for Survival

5 Oct 2016   Canada, Tar Sands

Canada’s oil-sands industry is in a race with other forms of crude production and emerging technologies such as electric cars to remain a relevant energy source in the coming decades, according to consultancy Deloitte LLP. Among various scenarios, oil-sands producers face the risk of a “forced transition” away from oil and natural gas as power generation is dominated by solar panels and wind turbines and as electricity replaces oil as a transportation fuel, Deloitte said in a report released Tuesday. Most of Canada’s oil and gas would be stranded and only the lowest-cost producers would survive by spending on innovative technology. “Companies should reflect on what actions they might take today to provide resilience in the face of different future scenarios,” Andrew Swart, Daniel Rowe and Paul Craig wrote in the report. Companies including Suncor Energy Inc., Imperial Oil Ltd. and competitors have been slashing operating costs as they […]

Three new oil sands projects approved in Alberta

17 Sep 2016   Canada, Tar Sands

Three new oil developments in the Fort McMurray area could add up to 95,000 barrels of oil per day to current output, Alberta’s government said. The provincial government approved three oil sands developments , two of which involved the use of steam stimulation. Collectively, the government said the projects represent about $3 billion in investments into Alberta’s economy. They each fall under a new scheme aimed at limiting the amount of greenhouse gas emissions associated with oil sands developments. “The emissions limit is the first of its kind set by an energy-producing jurisdiction,” Environment Minister Shannon Phillips said in a statement. “It positions Alberta as an environmental leader while allowing room for development.” Alberta’s economy is recovering after around 1 […]

Suncor Energy Seeks Permission to Abandon Some Oil-Sands Assets

8 Sep 2016   Canada, Tar Sands

Suncor Energy Inc., SU -0.58 % Canada’s largest oil producer, is in talks with government officials for permission to “strand,” or abandon, some high cost and greenhouse gas-intensive crude-oil deposits, the company’s chief executive said Wednesday. The Calgary-based company is seeking an easing of rules designed to maximize oil-sands production from leases on government land, CEO Steve Williams said at a Barclays BCS -0.66 % energy conference in New York, reiterating a strategy he first announced in July. “We’ve begun to have conversations with the government of Alberta and the current regulators about the design of their policy, which actually requires the maximum amount of resource to be extracted regardless of the economic or environmental value,” he said. The request comes as Suncor and other oil producers struggle to cut costs amid […]

Canada’s Economy Shows Signs of Life Beneath Oil-Fire Damage

1 Sep 2016   Canada, Tar Sands

Output grows 0.6% in June to cap grim second-quarter result Data suggests GDP ‘to get a nice lift in the third quarter’ Canada’s economy grew at the fastest pace in three years in June, regaining momentum after Alberta wildfires led to the biggest quarterly contraction since 2009. While crimped oil production cut second-quarter output by a 1.6 percent annualized pace, Statistics Canada said Wednesday from Ottawa, gross domestic product grew 0.6 percent in June, exceeding consensus expectations for a 0.4 percent expansion. Economists often put more weight on the last month of a quarter as a sign of future growth. “We know that second quarter growth would have been marginally positive without the impact of the fire in Alberta, and we are going to get a nice lift in the […]

Cnooc Posts 1st Half-Year Loss on Canadian Oil Sands Charge

24 Aug 2016   Canada, China, Tar Sands

Reports first-ever half year loss at 7.74 billion yuan Total output slips more than 5% from second half of 2015 Cnooc Ltd. posted its first-ever half-year loss as crude’s plunge and writedowns on assets, including Canadian oil sands, destroyed profit at China’s biggest offshore oil and gas producer. The company swung to a 7.74 billion yuan ($1.16 billion) loss in the January to June period, compared with a net income of 14.7 billion yuan a year earlier, the Beijing-based explorer said in a statement to the Hong Kong stock exchange on Wednesday. Oil and gas revenue fell 28.5 percent to 55.08 billion yuan and the company declared an interim dividend of HK$0.12 per share. During the first half of the year, Brent crude, the global benchmark, averaged roughly 30 percent lower than the same period in 2015, roiling global explorers. Prices have whipsawed this year, flipping five times between […]

Suncor Mulls Stranding Some Oil in Bid to Cut Costs, Save Planet

29 Jul 2016   Canada, Tar Sands

Suncor Energy Inc. is discussing with the Alberta government leaving some oil-sands bitumen in the ground in order to lower emissions and reduce costs, Chief Executive Officer Steve Williams said. The provincial government in Alberta requires producers to extract “a very high percentage” of the fossil fuel at a given project because those reserves are owned by the public, Williams said Thursday during a conference call with analysts. While it’s “counter-intuitive” to consider leaving oil in the ground, doing so would yield economic and environmental benefits, he added. “You could be talking about 10 or 20 percent improvements in the economics of some of those extraction operations,” Williams said. “We would like to leave that last piece in” and produce the best parts of a site, he added. Suncor plans to hold total greenhouse gas emissions at current levels through 2030, even as it boosts crude production, by reducing […]

Chinese Energy Giant’s Big Bet on Oil Sands Backfires

15 Jul 2016   China, Tar Sands

Three years after spending $15 billion on an ambitious bid to revitalize a troubled oil-sands project in a northern Canadian swampland, one of China’s largest state-controlled oil companies has run out of gas. “The deal has turned out to be a bit of a dud for them,” said Gordon Houlden, a China expert at the University of Alberta. The Nexen acquisition ranked as China’s biggest-ever overseas takeover, surpassed only recently by China National Chemical Corp.’s pending acquisition of Switzerland’s Syngenta SA. In buying Nexen, Cnooc aimed to use it as a beachhead in North America after the failure of a controversial 2005 bid for Unocal, now a unit of Chevron Corp. CVX 0.05 % “They went in with their eyes wide open thinking there were things they could do to improve Nexen,” said Greg Stringham, an industry consultant who until recently was in charge of oil sands at […]

CNOOC Cutbacks at Long Lake Oil-Sands Site Caps Years of Trouble

15 Jul 2016   China, Tar Sands

Long Lake upgrader mothballed after January explosion Northeastern Alberta site had history of underperformance CNOOC Ltd.’s decision this week to idle part of its Long Lake oil-sands operation in Alberta comes after five years of problems cemented the site’s reputation as one of the most troubled projects in the region. Long Lake, which CNOOC first got involved with in 2011 as part of a takeover of heavily indebted Opti Canada Inc., has never reached its production capacity and has been plagued by accidents, including workers’ deaths, explosions and pipeline spills. The operation experienced cost overruns and underperformance before CNOOC gained complete ownership when it paid about C$15 billion in 2013 for Nexen Energy. The site in northeastern Alberta combines of steam-assisted extraction and upgrading that removes the impurities and converts the thick bitumen into synthetic crude. The upgrader’s small size and carbon footprint mean it’s costly to operate, said […]

Nexen to Cut 350 Jobs in Canada After Oil-Sands Explosion

13 Jul 2016   Canada, Tar Sands

Unit of Cnooc says upgrader not repairable in short term Company to contine bitumen production at Long Lake site Cnooc Ltd.’s Nexen Energy unit will eliminate 350 jobs this year after deciding not to repair its Long Lake oil-sands upgrader in northern Alberta following an explosion in January. The facility, which processes bitumen into light synthetic crude oil, can’t be feasibly repaired in the short term, executives said on a call with reporters on Tuesday. Workers will lose their jobs at Long Lake and at the Calgary headquarters. Nexen will continue producing bitumen from Long Lake, resulting in lower costs, as well as improved reliability and safety, the company said. It plans to make a final decision about returning the upgrader to service later this year, taking into consideration changing market conditions. The explosion of a hydrocracker in the upgrader that killed two employees is among recent challenges for […]

Canada’s Oil-Sands Industry Girds for Leaner Times

11 Jul 2016   Canada, Tar Sands

As the Canadian oil-sands hub of Fort McMurray, Alberta, battles to rebuild after wildfires that ripped through in May, the industry that made it a boomtown is contemplating the end of an era of rapid growth. The wildfires, which roiled global crude markets by temporarily shutting off production of at least a million barrels of oil a day, added to the mounting woes of Canada’s oil-sands producers. High costs, tighter regulations, and tougher competition from shale oil have turned the industry into one of the biggest casualties of a two-year-old swoon in oil prices. “A lot of plans that were based on triple-digit oil prices in the $100s [per barrel] are having to be adjusted in this environment,” said Murray Edwards, chairman of Canadian Natural Resources Ltd. CNQ 1.71 % “All of us are […]

Oil-Sands Crude Returns to U.S. Market When It’s Less Needed

8 Jul 2016   Canada, Tar Sands

U.S. oil imports from the north fell to lowest since April Canadian oil is back to market after Alberta wildfire Canadian oil-sands producers who are restoring production after wildfires are finding U.S. refiners are doing just fine without as much crude from their northern neighbor. The U.S. imported 2.6 million barrels a day from Canada last week, the smallest amount since May 13, preliminary data from the Energy Information Administration show. The decline came after producers including Suncor Energy Inc. and Syncrude Canada Ltd. brought back more than a million barrels a day that was shut in May amid the worst wildfire in Alberta’s history. U.S. refiners made commitments to import crude by sea from alternative suppliers when the northern Alberta wildfire was out of control, and the duration of disruption to supplies was unclear, John Auers, executive vice president at Turner Mason & Co. in Dallas, said by […]

Alberta oil sands producers will eye new projects at $55-$60/b WTI: execs

7 Jul 2016   Tar Sands

Investments in additional oil sands production capacity in Alberta will be boosted with a WTI price hovering between $55/b and $60/b even as producers spare no effort to reduce their capital costs, executives said Wednesday. “It is still tough out there, but in the past year we have dropped operating and capital costs by 17% and 30%, respectively, with our focus still being on consolidation and optimization,” Lyle Stevens, Canadian Natural Resources executive vice president, told the 2016 TD Securities Energy Calgary Conference. CNR is adding 23,000 b/d of oil equivalent of heavy and light oil output in Western Canada over the coming six months at a cost of C$17,000 ($13,120)/flowing barrel and is also three months away from adding 45,000 b/d of bitumen output at its Horizon facility in northern Alberta, he said. Flowing barrel costs include construction costs and sustaining capital and operating expenditure. “We’re feeling a […]

Breakthrough In Oil Sands Tech Could Transform The Industry

6 Jul 2016   Tar Sands

Oil Sands Factory Oil sands extraction evokes dark scenes of toxic trailing ponds and apocalyptic wastelands—but that’s Alberta. Welcome to Utah, where extraction leaves no trace as MCW Energy positions itself on the right side of history, breaching a major gap between industry and environment and taking yet another step toward reaching new markets with its clean tech. It’s a popular rule of thumb that whenever something looks too good to be true, it is. Yet, like all rules, there are exceptions, and one of these exceptions is the oil extraction technology developed by Canadian company MCW Energy (OTC:MCWEF). The world still seems to be awash in oil, even though some are questioning the reality of the glut, and there’s growing pressure on the oil industry to put the brakes on in order to save the environment. But the glut has only made it easier for MCW to use […]

Low oil prices left Alberta with a massive deficit

1 Jul 2016   Canada, Tar Sands

An annual review of the budget for oil-rich Alberta found total revenue came in lower than budgeted, though the provincial finance minister was upbeat. The decline in crude oil prices resulted in a 3.7 percent contraction in Alberta’s economy. “Energy companies significantly decreased investment this past year,” the provincial government said in its latest review. “Corporate profits decreased and employment, wages and household incomes were all negatively influenced across the province.” Crude oil prices moved from about $105 per barrel in June 2014 to an average price the provincial government said was about $4 per barrel lower than it expected. West Texas Intermediate, the U.S. benchmark price for oil, dropped below $30 per barrel […]

Canada oil sands output to grow 42 percent by 2025: report

28 Jun 2016   Canada, Tar Sands

Canada’s oil sands production will grow by 42 percent to 3.4 million barrels per day by 2025, most of which will come from the expansion of existing facilities rather than new projects, analysts at IHS Energy said on Monday. The million-barrel-per-day increase in output over the next nine years is less than what IHS would have estimated before the collapse in global oil prices, spokesman Jeff Marn said. Low crude prices have forced producers such as Cenovus Energy and Royal Dutch Shell to slam the brakes on sanctioning new oil sands plants, while all projects currently under development will be completed by 2018, HIS said. Future growth will have to come from so-called “brownfield” expansions where costs have come down as a result of lower construction activity, improved operating efficiencies and cheaper natural gas. “We expect oil sands producers to focus future investments in the coming years onto their […]

As Canada Oil Fires Fade, the Industry’s Real Problem Re-Emerges

14 Jun 2016   Canada, Tar Sands

Harbir Chhina helped develop the game-changing steam technology that allowed companies to tap the world’s third-largest reserves in Canada’s oil sands. It was a moonshot that paid off. Now the oil-sands industry, still recovering from last month’s wildfires, needs another one. Without a technological breakthrough like steam injection three decades ago, the flows that have transformed the country’s economy could slow to a trickle. In a world that has plenty of cheap crude, and increasingly demands cleaner energy, the oil sands look dirty, as well as expensive. “We didn’t use that word moonshot,” but that’s what it was, says Chhina, now a top exec at Cenovus Energy Inc. The search for cleaner and cheaper techniques may be less urgent than fighting the blaze, which knocked out more than 1 million barrels of daily output and forced the evacuation of an entire city. But in the long run it’s a […]

ConocoPhillips To Restart Production Amid Alberta Gasoline Shortages

9 Jun 2016   Tar Sands

ConocoPhillips has announced it will restart production at the Surmount oil sands project, as the northern Alberta wildfire threat subsides. The company said the minor damage caused to the site by the fire would not affect operations and that the facility would incrementally recover its 30,000 barrel-per-day production rate in the near future. The timing for ConocoPhillips’ restart couldn’t come soon enough. A majority of Petro-Canada stations in Regina ran out of all grades of gasoline Monday morning, according to report by Leaderpost , due in part to the scale of the wildfires and an unanticipated power outage at an Edmonton refinery. Stations in the provinces of Manitoba, Alberta and British Columbia have also been affected by the supply shortage. “We do have a team that is working quickly to make the necessary repair, and bring that unit back into service as promptly and safely as possible,” […]

Alberta Fire Threat Returns as Two Oil Producers Shut Sites

9 Jun 2016   Canada, Tar Sands

A new wildfire has prompted Canadian oil producers Cenovus Energy Inc. and Canadian Natural Resources Ltd. to shut production just as output was being restored in other parts of Alberta after last month’s fires that cut about 40 percent of the region’s production. Cenovus evacuated workers and shut its Pelican Lake operations, which produced less than 23,000 barrels of oil a day in the first quarter, and Canadian Natural brought down about 800 barrels a day of output from its nearby site, the companies said in e-mails Wednesday. This new fire erupted about 30 kilometers (19 miles) northeast of Wabasca and covers an area of less than a square kilometer, Travis Fairweather, an Alberta Forestry spokesman, said by phone. The blaze was about 1 kilometer from the Cenovus facility with winds blowing it to the northeast, away from the site. The production shutdowns near Pelican Lake are a reminder […]

‘We’re just not competitive’: Why the oil patch can’t cut its way to growth

8 Jun 2016   Tar Sands

No matter how much Canadian oil sands producers cut costs, John Stephenson argues it can never be enough. While the CEO of Stephenson & Co. noted some players in the sector will be able to squeeze out tiny profits in a US$50 per barrel oil price environment – Husky Energy and Suncor Energy, for example, can operate with at least some margin for profitably with prices above the US$30 level – he stressed the oil sands’ economic heyday is over. “I’m sure the last buggy-whip manufacturer had razor-thin margins and it would have done an excellent job of cutting costs,” Stephenson told BNN on Tuesday, “but it doesn’t really matter if there’s a systemic shift.” Oil sands producers in northern Alberta have among the highest operating costs in the world. At the same time, limited market access due to ever-increasing controversies surrounding new pipeline proposals, combined with the higher […]

Parts of Alberta oil industry returning to normal after wildfire

1 Jun 2016   Tar Sands

With oil installations resuming normal operations, the provincial government of Alberta said it was ready for phased re-entries into fire-damaged Fort McMurray. The chief medical officer in Alberta said about 560 homes and a dozen apartment complexes were deemed still unsafe for habitation , nearly one month after wildfires in the Fort McMurray area forced the largest evacuation in Canadian history. “Despite this unwelcome news, we remain on track for voluntary, phased re-entry of the vast majority of Fort McMurray and the surrounding communities,” Alberta Premier Rachel Notley said Monday. Some debris fields in and around the municipality of Wood Buffalo remain off limits for some returning residents because of […]

Suncor Starts to Bring Canadian Oil Sands Back Online

30 May 2016   Tar Sands

Suncor Energy said it expects to restart its Canadian oil sands operations, such as work… Canada’s largest crude-oil producer said it expects initial production to commence by the end of this week, noting startup activities had begun at its base plant and its MacKay River facility. Suncor’s announcement is the latest sign that Canadian oil sands outages ‎are slowly coming to an end. The global oil market was brought closer to balance in recent weeks by a series of temporary disruptions , including the one in the Canadian oil sands. Production was halted at Suncor‎earlier this month as wildfires forced the evacuation of Fort McMurray, located some 270 miles‎north of the provincial capital of Edmonton. None of Suncor’s facilities were damaged as a result of the fires, the company said. ‎ “Suncor has moved over 4,000 employees and contractors back into the region,” the company said in a release, […]

Why Canada’s Oil Sand Producers Will Recover Quickly From The Wildfires

27 May 2016   Tar Sands

Alberta Oil Sands Factory Canada’s oil sands producers in the Fort McMurray region are watching the weather to determine if and when they can move the necessary people back to their operations to resume production and put some one million barrels per day (b/d) of bitumen back on line. Several operators are already moving personnel back to the region. Only a week ago it looked like oil sands operations north of the city had been spared. Then the fire changed direction requiring the evacuation of the same plants and camps in which displaced residents of Fort McMurray had sought refuge only a week earlier. The 5,000 square kilometer boreal forest wildfire, accurately named “the beast”, has a mind of its own. To put the size into perspective, greater Houston only covers 1,500 square kilometers. While hundreds of firefighters employing hundreds of millions of dollars of support equipment have proven […]

Alberta wildfire singes companies beyond energy sector

26 May 2016   Tar Sands

The wildfire that has ravaged northern Alberta and cut Canadian crude output by 25 percent is set to crimp corporate earnings beyond the oil patch, especially hitting the rail and hospitality sectors. The fire, which has caused an estimated $50 million a day in lost production for oil sands companies near the evacuated city of Fort McMurray, has also caused pain to large companies that serve the sector and smaller ones catering to thousands of industry workers. Canadian National Railway Co ( CNR.TO ) has said it ran a freight train to Fort McMurray for the first time since May 3. It typically operates three trains a week to the city. Separately, the Bank […]

Canadian oil sands cleared for re-entry near fire-ravaged Fort McMurray

25 May 2016   Tar Sands

With wildfires in Canada making their way east, provincial authorities in Alberta said the oil-rich parts of the region are cleared for operations. Alberta’s government said wildfires that erupted in early May remain out of control in the Fort McMurray area, home to some of the largest oil sands installations in the country. While more than 2,000 square miles of land are affected, the fires are moving east and now cover about 10 square miles in neighboring Saskatchewan. A mandatory evacuation order remains in place for Fort McMurray and the surrounding municipalities , though the provincial government said workers can start heading back into the region. “The phased re-entry for […]

Canada’s Oil-Sands Producers Set to Re-Enter Evacuated Sites

24 May 2016   Tar Sands

All of the Canadian oil-sands facilities that workers fled last week as a wildfire spread are being allowed to prepare for restart as cool, humid weather has helped contain the inferno. Alberta lifted mandatory evacuation orders for the last of the accommodation and production sites on Monday, which started the process of inspections by forestry and health officials to make sure they’re safe for workers to return. Since late Friday, the province has removed orders that had prevented all but critical staff from remaining on sites connected with the operations of Suncor Energy Inc., Syncrude Canada Ltd., ConocoPhillips and Cnooc Ltd.’s Nexen unit, among others. Oil-sands operators took more than 1 million barrels a day of output offline this month as a wildfire forced the evacuation of workers and the shutdown of pipelines and power supplies. More than 80,000 people fled the blaze from Fort McMurray and surrounding areas […]

Key Pipeline Could Unleash Alberta’s Oil Sands

Alberta Pipeline Canadian energy regulators handed a win to Alberta’s oil sands producers last week, recommending approval for a major oil pipeline expansion to the Pacific Coast. Canada’s National Energy Board determined that the expansion of the Trans Mountain pipeline is in the public interest, handing the project’s developer, Kinder Morgan, a key victory. Kinder Morgan already operates an existing pipeline that runs from Alberta to British Columbia, moving 300,000 barrels of oil per day to the coast. But the company is trying to expand the pipeline by running a twin line that would nearly triple capacity to 890,000 barrels per day. Kinder Morgan’s share price jumped by more than 3 percent on news of the NEB decision. The pipeline is one of a handful of major projects that Alberta’s oil industry is desperate to push forward. The lack of pipeline capacity is holding back Canadian oil exports, and […]

Oil sands companies losing up to $50 million a day as fires rage: analysts

23 May 2016   Tar Sands

A wildfire burns near Highway 63 south of Fort McMurray, Alberta, Canada, May 8, 2016. Out-of-control wildfires that have consumed over a million acres of land in Canada’s Alberta are costing oil companies as much as $50 million a day in lost production, according to analysts. Alberta’s oil producers curtailed production by May 5 as fires prompted the evacuation of Fort McMurray, a central production hub. By May 9, more than 1 million barrels of daily oil output had been halted. “We estimate total daily pre-tax profit loss at $45 to $50 million,” Barclays analyst Paul Cheng said in an email to Reuters. For many companies, the shut-ins will translate directly to lower revenue in the second quarter, said Chris Feltin, an analyst at Macquarie Capital in Calgary. “The big thing here is that business interruption insurance is unlikely to be claimed because the damage isn’t direct to their […]

Suncor Poised to Get Back to Work as Fire Evacuations Eased

23 May 2016   Tar Sands

Cooler, humid weather that’s helping control a wildfire in the heart of Canada’s oil patch is allowing Suncor Energy Inc. and Syncrude Canada Ltd. to start getting back to work. Municipal authorities, citing improved conditions late on Friday, lifted mandatory evacuation orders for seven oil-sands worker accommodation camps and production facilities in Alberta, including Suncor’s base plant mine and Syncrude’s Mildred Lake mine. That’s much sooner than they’d predicted just hours earlier, under the expectation that air quality would need to improve and a few more days of firefighting would be necessary to make those sites safe. More than 1 million barrels a day of output was taken off line by a wildfire that’s ravaged the region since the start of May. More than 80,000 people fled the inferno from Fort McMurray and surrounding communities initially, and another 8,000 workers were forced to clear out earlier in the week […]

Alberta’s Wildfires Couldn’t Have Come at a Worse Time for the Local Economy

21 May 2016   Tar Sands

Play VideoPlayMuteCurrent Time 0:00/Duration Time 0:00Loaded: 0%Progress: 0%Stream TypeLIVERemaining Time -0:00Playback Rate1Chapters Chapters Subtitles subtitles off Captions captions settings captions off Fullscreen This is a modal window. No compatible source was found for this video. Foreground — — Background — — Window — — Font Size 50% Text Edge Style None Font Family Default Defaults Done Advertisement Wildfire Threat to Canadian Oil Sands Diminished The wildfires raging in Alberta are destined to go down as the most expensive natural disaster in Canada’s history, doing monumental damage to property and the environment in the process. These blazes may have also caused harm to the province’s nascent economic green shoots . A smattering of recently released data suggests that activity in the province was firming near the end of the first quarter as oil prices began to move above $40 per barrel (U.S.). On Thursday, Statistics Canada reported that initial jobless […]

Alberta Wildfire Has Stopped Spreading, Officials Say

21 May 2016   Tar Sands

Firefighting efforts and favorable weather conditions on Friday stopped the growth of forest fires in northern Alberta that have prompted evacuations and disrupted crude-oil production, provincial officials said. The size of the out-of-control wildfire is unchanged from Thursday, at around 1.25 million acres, and local authorities expressed confidence they could prevent it from spreading due in part to cooler, damper weather. “We expect to hold this fire in place over the weekend,” said Chad Morrison, the Alberta forest ministry’s chief wildfire official, at a news conference in Edmonton. No oil-sands production facilities have been damaged by the fires, but at the height of the threat, Canadian oil production dropped by at least one million barrels a day, or about 40% of the country’s total oil-sands output. Mr. Morrison said blazes near two major […]