Oil Sands Industry in Canada - Market Analysis, Competitive Landscape and Production Forecasts to 2020

Published: November 2012
No. of Pages: 76
  

Oil Sands Industry in Canada - Market Analysis, Competitive Landscape and Production Forecasts to 2020

Summary

“Oil Sands Industry in Canada - Market Analysis, Competitive Landscape and Production Forecasts to 2020” is the latest report from GlobalData, the industry analysis specialist. The report provides an overview of the oil sands industry in Canada and analyses some of the major drivers and challenges, project economics of oil sands projects, historic and projected bitumen and synthetic crude production, some of the major existing and planned oil sands projects, financial deal activity, and the competitive landscape in the industry.


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


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

Scope

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

Reasons to buy

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

Oil Sands Industry in Canada - Market Analysis, Competitive Landscape and Production Forecasts to 2020

1 Table of Contents
1 Table of Contents 4
1.1 List of Tables 6
1.2 List of Figures 7
2 Introduction 8
2.1 Overview 8
2.2 GlobalData Report Guidance 9
3 Oil Sands in Canada - An Introduction 10
3.1 Canada has the Third Largest Proved Oil Reserves in the World 11
3.2 Bitumen is Recovered from Oil Sands Primarily through Mining and Drilling (In situ) Methods 13
3.3 Canadian Oil Sands are Important for World and US Energy Security 15
3.4 Energy Resources Conservation Board is a Key Regulator of the Oil Sands Industry in Alberta, Canada 16
4 Oil Sands in Canada - Drivers and Challenges 17
4.1 Increasing Global Oil Demand is Driving the Development of Oil Sands in Canada 17
4.2 Oil Sands Industry Continues to Attract Foreign Investment due to Favorable Business Climate in Canada 18
4.3 High Crude Oil Prices will ensure the Growth of Oil Sands Industry in Canada 19
4.4 Technological Developments are Helping to Increase Oil Recovery and Reduce Environmental Impact of the Oil Sands Developments 19
4.5 Key Oil Sands Players Form Canada’s Oil Sands Innovation Alliance to Improve Environmental Performance of the Canadian Oil Sands 21
4.6 Oil Sands Industry Continues to Attract Criticism due to High Water Use and Greenhouse Gas Emissions 22
4.7 EU has Proposed Labeling Crude Oil Produced from the Canadian Oil Sands as High Carbon Intensity Fuel 23
4.8 Canadian Oil Sands Industry is Expected to Face Skilled Labor Shortages in the Future 24
5 Oil Sands in Canada - Project Economics 25
5.1 Cost of Production in Oil Sands Projects Depends on the Process used to Recover Bitumen 25
5.2 Canada’s Oil Sand Projects Witnessed Capital and Operating Expenditures of CAD$22.7 Billion and CAD$18.2 Billion in 2011 26
5.2.1 Crude Oil Prices Determine the Capital Expenditure of New Oil Sands Projects in Canada 27
5.3 Canada’s Oil Sands Projects Using In Situ Technology Attracted a Capital Expenditure of CAD$11.9 Billion in 2011 27
5.4 Capital and Operating Expenditures of Canadian Oil Sand Projects for Upgraders in 2011 were CAD$2.4 Billion and CAD$5.35 Billion 28
5.5 Geological Factors Influence Cost of Operations of the Canadian Oil Sands Projects 29
5.5.1 Canadian Oil Sands’ Geology Affects the Cost of the Crude Oil Production 30
6 Oil Sands in Canada - Historic Production and Major Oil Sands Projects 31
6.1 Oil Sands Industry in Canada Produced 581.9 MMbbl of Bitumen and Synthetic Crude in 2011 33
6.1.1 Athabasca Region Recorded the Largest Bitumen Production from Oil Sands in Canada for 2011 34
6.1.2 Mining Produced Approximately 52.1% of Bitumen and Synthetic Crude from Oil Sands in Canada in 2011 35
6.1.3 Heavy Oil Upgraders in the Canadian Oil Sands Industry Recorded a Capacity of 453.1 MMbbl for 2011 37
6.2 Syncrude is the Largest Heavy Oil Upgrader Project in Canada as of 2011 39
6.3 Base Operations (Steepbank/Millennium) Oil Sands Project Produced 105.1 MMbbl of Bitumen in 2011 42
6.4 Cold Lake is the Largest In Situ Production Project in Canada 43
7 Oil Sands in Canada - Production Forecasts and Major Planned Projects 44
7.1 Oil Sands Industry in Canada is Expected to Produce 3.2 MMbbl/d of Bitumen and Synthetic Crude by 2020 45
7.1.1 Athabasca is Set to Continue its Dominance in Bitumen and Synthetic Crude Production in the Canadian Oil Sands Industry by 2020 46
7.1.2 In Situ Drilling will Gain Prominence in Bitumen and Synthetic Crude Production from Canada’s Oil Sands by 2020 47
7.1.3 Canada is Expected to Have a Heavy Oil Upgraders Capacity of 542.5 MMbbl by 2020 48
7.2 Fort Hills is One of the Largest Planned Oil Sands Projects in Canada 49
7.3 Nexen is Developing Phase II and Phase III of the Long Lake Project in Canada 51
7.4 Suncor Energy’s Voyageur South Project is Expected to Produce 120,000 Barrels per Day of Bitumen in the Future 52
8 Oil Sands in Canada - Recent Financial Deal Activity 53
8.1 Oil Sands Industry in Canada Witnessed 28 Financial Deals in January to August 2012 53
8.1.1 High Deal Activity Reaffirms the Significant Industry Interest in Canada’s Oil Sands 54
8.2 CNOOC’s Acquisition of Nexen will Bolster the Acquirer’s Oil Portfolio by about 30% 56
8.2.1 CNOOC’s Planned Acquisition of Nexen Reaffirms Growing Interest of Chinese Companies in Canadian Companies and Assets 57
8.2.2 Canada might Approve the CNOOC’s Acquisition of Nexen as it Requires Foreign Capital for Developing Oil Sands 59
8.3 ONGC Consortium Plans to Acquire ConocoPhillips’ Oil Sands Assets of in Canada to Reinforce their Global Oil Portfolio 60
8.4 Koch Oil Sands Plans to Sell Six Oil Sands Properties in Alberta for $2.9 Billion 61
9 Oil Sands in Canada - Competitive Landscape 62
9.1 Suncor Energy had Net Proved and Probable Bitumen Reserves of 1,164 MMbbl by the End of 2011 62
9.2 Imperial Oil Limited Reported Net Proved Bitumen Reserves of 2,413 MMbbl by the End of 2011 64
9.3 Shell Produced 45 MMbbl of Synthetic Crude Oil in 2011 66
9.3.1 Shell Canada Plans to Construct First Carbon Capture and Storage Project in the Canadian Oil Sands Industry 68
9.4 Canadian Natural Resources Limited is Among the Major Companies Engaged in Oil Sands Projects in Canada 69
10 Appendix 71
10.1 Market Definition 71
10.2 Abbreviations 71
10.3 Sources 72
10.4 Methodology 74
10.4.1 Coverage 74
10.4.2 Secondary Research 75
10.4.3 Primary Research 75
10.4.4 Expert Panel Validation 75
10.5 Contact Us 75
10.6 Disclaimer 76

1.1 List of Tables
Table 1: Oil Sands Industry, Canada, Supply and Operating Costs* Estimates by Process Used for the Recovery of Bitumen ($/bbl), 2010 25
Table 2: Oil Sands Industry, Canada, Crude Oil Prices Required for Capex of New Oil Sands Projects, 2010 27
Table 3: Oil Sands Industry, Canada, Capex and Opex of Oil Sands Projects in Canada by In Situ and Mining Technologies (CAD$m), 2006-2011 27
Table 4: Oil Sands Industry, Canada, Major Milestones Leading to the Commercial Production from Oil Sands, 2012 31
Table 5: Oil Sands Industry, Canada, Bitumen and Synthetic Production from Oil Sands in Athabasca, Cold Lake and Peace River Areas (MMbbl), 2006-2011 34
Table 6: Oil Sands Industry, Canada, Heavy Oil Upgraders Capacity (MMbbl), 2006-2011 38
Table 7: Oil Sands Industry, Canada, Details of Top Five Oil Sands Projects (bbl/d), 2011 39
Table 8: Oil Sands Industry, Canada, Expected Bitumen and Synthetic Production from Oil Sands in Athabasca, Cold Lake and Peace River Areas (MMbbl), 2011-2020 46
Table 9: Oil Sands Industry, Canada, Bitumen Sources for Long Lake Upgrader (bbl/d), 2012-2014 52
Table 10: Oil Sands Industry, Canada, Major Financial Deals ($m), 2010-August 2012 55
Table 11: Oil Sands Industry, Canada, Nexen’s Oil Sands Production Interests in Canada, bpd, 2011 56
Table 12: Oil Sands Industry, Canada, Major Deals by China’s Companies in Oil and Gas Sector in Canada ($m), January-September 11, 2012 58
Table 13: Oil Sands Industry, Canada, Planned Acquisitions of Unconventional Oil and Gas Assets by Indian NOCs ($m), September 2010-July 4, 2012 60
Table 14: Oil Sands Industry, Canada, Oil Sands Assets being Acquired by ONGC Consortium from ConocoPhillips (MMbbl), 2012 60
Table 15: Oil Sands Industry, Canada, Suncor Energy’s Bitumen and Synthetic Crude Oil Reserves (Gross and Net) (MMbbl), 2011 63
Table 16: Oil Sands Industry, Canada, Suncor Energy’s Monthly Average Production and Year-to-Date Average Production from Oil Sands (bbl/d), 2011 63
Table 17: Oil Sands Industry, Canada, Shell’s Synthetic Crude Oil and Bitumen Production (Mbbl/d), 2009-2011 66
Table 18: Oil Sands Industry, Canada, Canadian Natural Resources Limited’s Gross Crude Oil and Bitumen Reserves (MMbbl), 2011 69
Table 19: Oil Sands Industry, Canada, Canadian Natural Resources Limited’s Capacity Targets and Scheduled Start Dates for In situ Projects (bbl/d), 2012 70

1.2 List of Figures
Figure 1: Oil Sands Industry, Canada, Composition of Oil Sands, 2012 10
Figure 2: Oil Exploration and Production Industry, Global, Top Countries by Proved Oil Reserves, billion bbl, 2012 11
Figure 3: Oil Sands Industry, Canada, Location of Oil Sand Deposits, 2012 12
Figure 4: Oil Sands Industry, Canada, Overview of Steam-Assisted Gravity Drainage and Cyclic Steam Stimulation Processes, 2012 13
Figure 5: Oil Sands Industry, Canada, Overview of Kearl Process, 2012 14
Figure 6: Oil and Gas Industry, The US, Top Five Countries of Origin for US Imports of Crude Oil and Petroleum Products (bbl/d), 2011 15
Figure 7: Oil Sands Industry, Canada, Overview of Energy Industry Regulation in Canada, 2012 16
Figure 8: Oil Industry, World, Projected Liquids* Demand (MMtoe), 2010-2030 17
Figure 9: Oil and Gas Industry, Canada, Foreign Direct Investment in the Canadian Energy Sector (CAD$m), 2005-2011* 18
Figure 10: Oil and Gas Industry, Canada, Working Mechanism of THAI Technology, 2012 20
Figure 11: Oil and Gas Industry, Canada, Greenhouse Gas Emissions by Sector (%), 2010 22
Figure 12: Oil and Gas Industry, Canada, Jacobs Consultancy’s Comparison of the Carbon Intensities of EU Crude Oils and Alberta’s Crude Oils, gCO2e/MJ of Crude, 2012 23
Figure 13: Oil Sands Industry, Canada, Capex and Opex of Oil Sands Projects (CAD$m), 2006-2011 26
Figure 14: Oil and Gas Industry, Canada, Capex and Opex of Upgraders (CAD$m), 2006-2011 28
Figure 15: Oil Sands Industry, Canada, Location of McMurray Formation in the Lower Athabasca Region, 2012 29
Figure 16: Oil Sands Industry, Canada, Breakdown of Canadian Crude Oil Production by Source, 2011 32
Figure 17: Oil Sands Industry, Canada, Production of Bitumen and Synthetic Crude (MMbbl), 2006-2011 33
Figure 18: Oil Sands Industry, Canada, Production of Bitumen and Synthetic Crude from Oil Sands by Region (%), 2006-2011 34
Figure 19: Oil Sands Industry, Canada, Bitumen and Synthetic Crude Production from Oil Sands in Canada by Recovery Method (MMbbl), 2006-2011 35
Figure 20: Oil Sands Industry, Canada, Shares of Mining and In Situ Drilling for the Production of Bitumen and Synthetic Crude from Oil Sands (%), 2006 and 2011 36
Figure 21: Oil Sands Industry, Canada, Bantrel’s Upgradation Process, 2012 37
Figure 22: Oil Sands Industry, Canada, Locations of Syncrude Project’s Oil Sands Leases, 2012 40
Figure 23: Oil Sands Industry, Canada, Syncrude Project’s Bitumen Production (MMbbl), 2006-2011 41
Figure 24: Oil Sands Industry, Canada, Base Operations (Steepbank/Millennium) Project’s Bitumen Production (MMbbl), 2006-2011 42
Figure 25: Oil Sands Industry, Canada, Cold Lake Project’s Bitumen Production (MMbbl), 2006-2011 43
Figure 26: Oil Sands Industry, Canada, Share of Oil Sands’ Crude in Total Crude Oil Production, 2011, 2015 and 2020 44
Figure 27: Oil Sands Industry, Canada, Expected Production of Bitumen and Synthetic Crude (MMbbl), 2011-2020 45
Figure 28: Oil Sands Industry, Canada, Expected Bitumen and Synthetic Crude Production by Recovery Method (MMbbl), 2011-2020 47
Figure 29: Oil Sands Industry, Canada, Expected Heavy Oil Upgraders Capacity (MMbbl), 2011-2020 48
Figure 30: Oil Sands Industry, Canada, Location of Fort Hills Project and Voyageur Upgrader, 2012 49
Figure 31: Oil Sands Industry, Canada, Location of the Long Lake Project, 2012 51
Figure 32: Oil Sands Industry, Canada, Location of Voyageur South Project, 2012 52
Figure 33: Oil Sands Industry, Canada, Comparison of Deals Value and Number of Deals ($m), 2010-August 2012 53
Figure 34: Oil Sands Industry, Canada, Investments by Chinese Companies in Canada''s Oil Sands Industry ($m), 2009-August 2012* 57
Figure 35: Oil Sands Industry, Canada, Locations of the Koch Oil Sands’ Six Oil Sands Properties, 2012 61
Figure 36: Oil Sands Industry, Canada, Suncor Energy’s Oil Sands Operations in Alberta, 2011 62
Figure 37: Oil Sands Industry, Canada, Imperial Oil’s Synthetic Oil and Bitumen Net Proved Reserves (MMbbl), 2011 64
Figure 38: Oil Sands Industry, Canada, Breakdown of Imperial Oil’s Total Crude Oil and Natural Gas Liquid Production (%), 2011 65
Figure 39: Oil Sands Industry, Canada, Shell’s Oil Sands Operations, 2011 67
Figure 40: Oil Sands Industry, Canada, Carbon Capture at Shell Canada’s Scotford Upgrader, 2012 68

Published By: GlobalData
Product Code: GlobalData26513


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