Oil Sands Industry in Canada, 2011 - Market Analysis, Competitive Landscape

Dec. 8, 2011 - PRLog -- Oil sands in Canada have gained importance due to the fact that about 97.1% of the country’s total economically recoverable oil reserves are in the form of oil sands. Canada has about 176.1 billion barrels (bbl) of initially established oil reserves.

At a global level, about 21% of the total oil reserves are accessible to private investors, 56% of which are located in Canada’s oil sands. This makes Canada an important destination for global E&P companies. As a result, Canada’s oil sands industry is witnessing an increase in mergers and acquisitions (M&As), asset transactions and capital expenditure (capex). In 2010, the oil and gas industry in Canada spent nearly 31% of its total capital expenditure on the Canadian oil sands, next only to the capital expenditure spent on the Northern Canada conventional oil and gas region.

As of 2010, production from Canada’s oil sands region accounted for about 60% of the country’s total crude oil production. The share of oil sands in Canada’s total crude oil production increased from 48% in 2005 to 60% in 2010 as a result of the sharp increase in oil sands exploration and production activities in the country. In 2010, bitumen production accounted for 78% of Alberta’s total crude oil and raw bitumen production. Canada’s total oil sands production is approaching a daily production of 1.47 Mbbl/d. The figure below shows the trend in crude oil production from oil sands and from conventional sources in Canada from 2005-2010.

The US is currently the largest market for Canada’s crude oil, accounting for more than 95% of Canada’s total crude oil exports. The US, after the successful development of shale gas, is trying to increase its domestic crude oil production from shale oil resources. With the increase in domestic crude oil production, the US will curtail some of its oil imports. This will affect the growth of oil sands development in Canada unless Canada develops new export markets for its crude oil.

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Canada is trying to develop new exports markets for its crude oil production. Consequently, the country is allowing foreign oil and gas companies to invest in oil sands projects. Oil and gas companies from Asia- Pacific have been at the forefront of securing participation in oil sands projects in Canada. In January 2011, China Petroleum & Chemical Corp (Sinopec), in a consortium with other companies, announced an investment of $100m in the Northern Gateway pipeline project. The pipeline will connect Canada’s oil sands area to British Colombia, from where the oil can be shipped to Asian countries.

“Oil Sands Industry in Canada, 2011 - Market Analysis, Competitive Landscape and Production Forecasts to 2015”, is the latest report from GlobalData, the industry analysis specialists, that analyzes the oil sands industry in Canada. The report provides information about Canada’s oil sands market until 2015. The report provides information on key oil sands projects and key companies in three major oil sands regions of Alberta: Athabasca, Cold Lake and Peace River. The report also provides key drivers and challenges for the industry in the current industry environment. The report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GlobalData’s team of industry experts.

The high crude oil price in the global market has made it economical and lucrative to develop the oil sands in Canada that require unconventional methods for the extraction of crude oil. Unconventional methods of extraction incur higher costs than conventional methods due to the use of advanced and complex technology.

Oil sands are the largest reserves of unconventional oil in Canada are expected to serve the Canadian oil and gas industry for a long time. The high oil consumption of the neighbouring US provides further impetus to the development of Canada’s oil sands industry.

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