The Oil Sands: Canada s World-Scale Hydrocarbon Resource

Transcription

1 The Oil Sands: Canada s World-Scale Hydrocarbon Resource Kuala Lumpur Explorationists Technical Meeting 13 June 2006 Kuala Lumpur Convention Centre, Malaysia R.B. (Bob) Dunbar Strategy West Inc. Calgary, Alberta, Canada Photo courtesy Syncrude Canada Ltd. 1 Presentation Outline Introduction Resources & Reserves Industry Technologies Existing & Proposed Projects Markets & Market Access Supply Costs Challenges Industry Outlook Conclusions 2 The Oil Sands: Canada's World-Scale Hydrocarbon Resource 1

2 Oil Sands to Synthetic Crude Oil Oil Sands: Deposits of sand, sandstone or other sedimentary rocks containing crude bitumen Crude Bitumen: A highly viscous mixture, mainly of hydrocarbons heavier than pentanes Synthetic Crude Oil: A mixture of hydrocarbons, similar to light crude oil, that is derived by upgrading crude bitumen or heavy oil 3 Photos courtesy of Syncrude Canada Ltd. Canadian Oil Production Alberta s Oil Sands provided 39% of Canada s crude oil production in 2005 (total 2,480 kb/d) Total SCO and Bitumen 964 kb/d Synthetic Bitumen Light Heavy Condensate (all figures thousand b/d) 4 Source: National Energy Board; March 24, 2006 The Oil Sands: Canada's World-Scale Hydrocarbon Resource 2

3 Bitumen Based Feedstocks to Refined Products REFINERY Bitumen Blends Synthetic Crude Oil Refined Petroleum Products Gasoline Diesel Jet Fuel Fuel Oils Lubricants Asphalt Others 5 Western Canada Sedimentary Basin 6 The Oil Sands: Canada's World-Scale Hydrocarbon Resource 3

4 Resources and Reserves Initial volume in place (bitumen): 1,699 x 10 9 barrels Initial established reserves: x 10 9 barrels Cumulative production: 4.6 x 10 9 barrels Remaining established reserves: x 10 9 barrels 7 Source: EUB ST ; Alberta s Reserves 2004 and Supply/Demand Outlook ; September 2005 Athabasca Volume In-Place Athabasca Wabiskaw- McMurray Oil Sands Deposit Bitumen pay criteria > 6% bitumen (mass) > 1.5 m 8 Source: EUB ST ; Alberta s Reserves 2004 and Supply/Demand Outlook ; September 2005 The Oil Sands: Canada's World-Scale Hydrocarbon Resource 4

5 Alberta and Saudi Oil Reserves Billion Barrels AB Conventional Oil AB Bitumen Saudi Conventional Oil 9 Sources: EUB ST ; Oil & Gas Journal, December 19, 2005 Mineable and In Situ Resources and Reserves Mineable Resources/Reserves < 75m depth to top of oil sands formation Athabasca only 6% of IBIP; 20% of initial established reserves; 68% of cumulative production In Situ Resources/Reserves > 75m depth to top of oil sands formation Athabasca, CL and PR 94% of IBIP; 80% of initial established reserves; 32% of cumulative production 10 Source: EUB ST ; Alberta s Reserves 2004 and Supply/Demand Outlook ; September 2005 The Oil Sands: Canada's World-Scale Hydrocarbon Resource 5

6 In Situ Recovery Technologies Primary Recovery Secondary Recovery Thermal Tertiary Recovery Steam-Based Thermal Recovery Processes Cyclic Steam Stimulation (CSS) Steam Assisted Gravity Drainage (SAGD) In Situ Combustion Toe-to-Heel Air Injection (THAI) Solvent-Based Tertiary Recovery VAPEX Thermal Solvent Hybrid (Steam-Solvent) Processes 11 Thermal In Situ Recovery Cyclic Steam Stimulation (CSS) Steam Assisted Gravity Drainage (SAGD) 12 Source: Canadian Centre for Energy Information The Oil Sands: Canada's World-Scale Hydrocarbon Resource 6

7 In Situ Footprint 13 Source: Pembina Institute CSS Projects - Cold Lake and Peace River (Bitumen capacity kb/d) Cold Lake Imperial Cold Lake CNRL Primrose Others 6 6 Totals Peace River Shell Cadotte/Carmon Others - - Totals Source: Regulatory applications and company announcements The Oil Sands: Canada's World-Scale Hydrocarbon Resource 7

8 SAGD Projects North Athabasca Bitumen Capacity (kb/d) Petro-Canada Dover 1 1 Petro-Canada Mackay River Suncor Firebag Total (Deer Creek) Joslyn 2 42 Husky Sunrise CNRL Birch Mountain - 60 EnCana Borealis Petro-Canada Lewis - 80 Totals Source: Regulatory applications and company announcements SAGD Projects South Athabasca Bitumen Capacity (kb/d) EnCana Christina Lake EnCana Foster Creek JACOS Hangingstone Nexen Long Lake ConocoPhillips Surmont Devon Jackfish - 70 MEG Christina Lake - 25 Petro-Canada Meadow Creek - 80 CNRL Gregoire Lake CNRL Kirby - 30 Connacher Great Divide - 10 North American Kai Kos Dehseh Totals 63 1, Source: Regulatory applications and company announcements The Oil Sands: Canada's World-Scale Hydrocarbon Resource 8

9 SAGD Projects Cold Lake Bitumen Capacity (kb/d) BlackRock Orion 1 20 CNRL Burnt Lake 1 1 Husky Tucker - 30 Totals Source: Regulatory applications and company announcements Surface Mining, Bitumen Extraction and Upgrading 18 Source: Athabasca Oil Sands Project The Oil Sands: Canada's World-Scale Hydrocarbon Resource 9

10 Truck and Shovel Mining 19 Source: Syncrude Canada Ltd. Albian Double Roll Crusher 20 Source: Athabasca Oil Sands Project The Oil Sands: Canada's World-Scale Hydrocarbon Resource 10

11 Albian Conveyors and Storage Silo 21 Source: Athabasca Oil Sands Project Ore Preparation 22 Source: Syncrude Canada Ltd. The Oil Sands: Canada's World-Scale Hydrocarbon Resource 11

12 Hydrotransport 23 Source: Syncrude Canada Ltd. Albian Primary Separation Vessels 24 Source: Athabasca Oil Sands Project The Oil Sands: Canada's World-Scale Hydrocarbon Resource 12

13 Albian Extraction Plant 25 Source: Athabasca Oil Sands Project Initial Tailings Disposal 26 Source: Pembina Institute The Oil Sands: Canada's World-Scale Hydrocarbon Resource 13

14 Reclamation 27 Source: Syncrude Canada Ltd. Athabasca Mining Projects Bitumen Capacity (kb/d) Suncor Steepbank/Millennium Syncrude North/Aurora AOSP Muskeg/Jackpine CNRL Horizon Petro-Canada (UTS) Fort Hills Imperial/Exxon Kearl Lake Synenco Northern Lights Total (Deer Creek) Joslyn Totals 722 2, Source: Regulatory applications and company announcements The Oil Sands: Canada's World-Scale Hydrocarbon Resource 14

15 Upgrading Approximately 2/3 of produced bitumen is currently being upgraded to synthetic crude oil (SCO) before being shipped to downstream markets The remaining 1/3 is currently being blended with diluents before being shipped to downstream markets Synthetic Crude Oil: A mixture of hydrocarbons, similar to light crude oil, that is derived by upgrading crude bitumen or heavy oil 29 Source: Syncrude Canada Ltd. Integrated Upgraders SCO Capacity (kb/d) Suncor Tar Island/Voyageur Syncrude Mildred Lake AOSP Scotford OPTI Long Lake CNRL Horizon Synenco Northern Lights CNRL Primrose Petro-Canada Sturgeon Total Joslyn/Surmont - 85 North American Kai Kos Dehseh Totals 668 2, Source: Regulatory applications and company announcements The Oil Sands: Canada's World-Scale Hydrocarbon Resource 15

16 Proposed Third-Party Upgraders Alberta Heartland Upgrader Strathcona County 3 stages 75,500 b/d bitumen blend each Approved July 2005 Stage 1 startup 2007 Alberta Industrial Heartland - Sturgeon County 3 stages 77,000 b/d bitumen blend each Applications filed Jan 2006 Stage 1 startup Sources: BA Energy, North West Upgrading North American Oil Markets Core Markets Extended Markets New Markets Husky-Prince George Shell Canada Imperi Petro-Canada al Edmonton Husky- ChevronTexaco-Burnaby Lloydminster BP-Cherry Point ConocoPhillips- Coop-Regina Tesoro-Anacortes Ferndale Shell-Anacortes Montana Ref-Great Falls ConocoPhillips Tesoro- Murphy- -Billings Exxon Cen Mandan Superior Mobil ex MAP- Koch- PetroCanada- St.Paul Pine Bend Imperial Oakville Sar Imperial- Sinclair- Shell nia Nanticoke Suncor MAP- United-Warren Salt Lake Casper Tesoro Sinclair- Citgo- Detroit Chevron BP -Toledo City Rawlins Frontier- Flying ExxonMobi Lemont BP- Sunoco MAP- - San Francisco Holly Texaco Cheyenne Whiting Toledo l-joliet J Valero Suncor Premcor- Canton MAP- Lima ConocoPhillips- Robinson NCRA- MAP- Los Angels Wood Frontier-El River McPherson Catlettsburg Dorado Farmland- Coffeyville ConocoPhillips- ConocoPhillips Ponca City Sinclair-Tulsa - Borger Housto n 32 Source: Canadian Association of Petroleum Producers The Oil Sands: Canada's World-Scale Hydrocarbon Resource 16

17 Beyond North America Prince Rupert/Kitimat Persian Gulf Korea China Taiwan Taiwan Japan Japan 3,840 ~ 4,500 N Miles ~ 8,600 N Miles 1,400 N Miles Los Angeles Los Angeles 1,790 SantaCruz Jose/ Jose/ La Cruz La Cruz ~ 5,400 N Miles Far East Target Markets U.S West Coast Competitive travel distances for Canadian supply to both markets 33 Source: Canadian Association of Petroleum Producers Oil Sands Industry Supply Costs Bitumen Supply Cost at Plant Gate Equivalent WTI Price at Cushing OK C$/b (2004) US$/b (2004) CHOPS CSS SAGD M&E 0 CHOPS CSS SAGD M&E ME&U 2004 Study 2005 Study 2004 Study 2005 Study 34 Source: Canadian Energy Research Institute; CERI Oil Conference; May 2005 The Oil Sands: Canada's World-Scale Hydrocarbon Resource 17

18 Challenges Facing the Oil Sands Industry Environmental Air emissions GHGs and Criteria Air Contaminants Water use Waste water disposal Land disturbance and reclamation Cumulative effects Energy Use, Sources & Costs Labour Availability & Productivity Capital Costs Markets Infrastructure Constraints Diluent Supply Socio-Economic Impacts Gas Over Bitumen 35 Oil Sands Industry Outlook Unadjusted Outlook Assumes all existing and proposed projects are developed and meet their scheduled startup dates Adjusted Outlook Project-by-project timing adjustments Project-by-project probability assessment 36 The Oil Sands: Canada's World-Scale Hydrocarbon Resource 18

19 Unadjusted Bitumen Production 6,000 Unadjusted Bitumen Production (kb/d) 5,000 4,000 3,000 2,000 1,000 Primary & Experimental Peace River In Situ Cold Lake In Situ South Athabasca In Situ North Athabasca In Situ Athabasca Mining Source: Strategy West Inc. Project-by-Project Adjustments Project Timing Lease evaluation Disclosure Application preparation and EIA Application review and approval Detailed engineering Internal approval Construction Phasing Project Probabilities Project status Owners Operating experience Financial capacity Technical capability Other factors Technology Existing operations Integration Timing 38 Source: Strategy West Inc. The Oil Sands: Canada's World-Scale Hydrocarbon Resource 19

20 Adjusted Bitumen Production Adjusted Bitumen Production (kb/d) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 Primary & Experimental Peace River In Situ Cold Lake In Situ South Athabasca In Situ North Athabasca In Situ Athabasca Mining Source: Strategy West Inc. Adjusted SCO and Non-Upgraded Bitumen Supply Adjusted SCO and Non-Upgraded Bitumen (kb/d) 3,500 3,000 2,500 2,000 1,500 1, Non-Upgraded Bitumen Synthetic Crude Oil Source: Strategy West Inc. The Oil Sands: Canada's World-Scale Hydrocarbon Resource 20

21 Adjusted Case CAPEX Average Annual Capital Expenditures ( , US$2006 Real) Thermal In Situ Mining & Extraction Upgrading Total $1.4 Billion $1.5 Billion $3.6 Billion $6.5 Billion Strategic Capital only figures do not include sustaining capital 41 Conclusions Canada s oil sands are one of the world s largest hydrocarbon accumulations The industry is well developed and making a significant contribution to world oil supply Oil sands projects are economically attractive at US$30-35/b WTI The industry faces many challenges but will overcome them and continue to grow 42 The Oil Sands: Canada's World-Scale Hydrocarbon Resource 21

22 Thank You Questions? Strategy West maintains an up-to-date list of existing and proposed oil sands projects at Photo courtesy Syncrude Canada Ltd. 43 The Oil Sands: Canada's World-Scale Hydrocarbon Resource 22