Overview of Canada s Oil Sands Industry CSSE Awards Banquet May 14, 2011 Calgary, Alberta Bob Dunbar Strategy West Inc. 12-1 Photo Source: Syncrude Canada Limited Presentation Outline Industry Overview Resources, Reserves & Production Mining & Bitumen Extraction In Situ Bitumen Recovery Bitumen Upgrading GHG Emissions Industry Outlook Conclusions 2 Strategy West Inc. 1
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 Illustrations: Syncrude Canada Ltd. Resources and Reserves (ERCB) 3 Oil Sands Areas (OSAs) comprising 15 major Oil Sands Deposits (OSDs) 142,000 square kilometres (54,000 square miles) Data at year-end 2009 Initial volume in place (bitumen): 1,804 billion barrels Initial established reserves: 176.8 billion barrels Cumulative production: 6.9 billion barrels Remaining established reserves: 169.9 billion barrels Remaining established reserves under active development: 26.5 billion barrels Source: ERCB ST98-20010; Alberta s Energy Reserves 2009 and Supply/Demand Outlook 2010-2019; June 2010 Strategy West Inc. 2
Mineable and In Situ Resources and Reserves Mineable Resources/Reserves < 65m (~215 ft) to top of oil sands Athabasca Oil Sands Area only 7% of initial volume in place 22% of initial established reserves 65% of cumulative production to year-end 2009 In Situ Resources/Reserves > 65m (~215 ft) to top of oil sands Athabasca, Cold Lake and Peace River Oil Sands Areas 93% of initial volume in place 78% of initial established reserves 35% of cumulative production to year-end 2009 Source: ERCB ST98-20010; Alberta s Energy Reserves 2009 and Supply/Demand Outlook 2010-2019; June 2010 World s Largest Oil Reserves Saudi Arabia Canada Venezuela Iran Iraq Kuwait UAE Russia Libya Kazakhstan Nigeria US Qatar China Angola Total World Oil Reserves at December 31, 2009 1,476 million barrels 0 50 100 150 200 250 300 Oil Reserves @ Year end 2009 (Million Barrels) Source: BP Statistical Review of World Energy; June 2010 Strategy West Inc. 3
Canadian Oil Production Alberta s Oil Sands provided 53% of Canada s crude oil production in 2010 (Canada s total: 2,869 kb/d) 423 518 288 799 Total SCO and Bitumen 1,509 kb/d 710 131 Synthetic Bitumen W Can C5+ W Can Light W Can Heavy E Can (all figures thousand b/d) Source: National Energy Board; February 10, 2011 Preliminary Estimates Surface Mining & Bitumen Extraction Surface Oil Sands Bitumen Mining Transport Extraction 8 Strategy West Inc. 4
Tailings Disposal Tailings are an aqueous waste product of the bitumen extraction process Tailings contain: Unrecovered bitumen Sand, silts and clays Residual solvents and chemicals from bitumen extraction Fluid fine tailings are difficult to consolidate Alberta s inventory of fluid fine tailings that require long term containment is now 840 10 6 m 3 Tailings ponds today are approximately 170 km 2 Source: Pembina Institute; Alberta Energy Resources Conservation Board Reclamation Disturbed Lands are to be returned to a state t that t is as biologically productive as the state that existed before operations commenced Syncrude received the first oil sands reclamation certificate in March 2008 Gateway Hill Reclaimed Land 10 Image Source: Canadian Oil Sands Trust. Strategy West Inc. 5
Surface Disturbance and Reclamation Oil Sands Mining Surface Disturbance Oil sands are located below the surface of 140,200 km 2 of land, 4.5% of Canada s total boreal forest Mineable oil sands only exist under 4,802 km 2, 0.1% of Canada s total boreal forest While disturbance is occurring daily, in more than 40 years oil sands mining has disturbed about 0.019% 019% of Canada s boreal forest some 602 km 2 Reclamation Reclamation work is ongoing and continuous in the oil sands to date, some 67 km 2 of land has been reclaimed Source: Oil Sands Developers Group In Situ Recovery: Dealing with Viscosity 12 Sources: Enerplus; Syncrude Canada Limited Strategy West Inc. 6
Steam Assisted Gravity Drainage (SAGD) Source: Canadian Association of Petroleum Producers Upgrading Overview Purpose: Produce higher value liquid hydrocarbon products Produce valuable byproducts Mechanisms: Remove or breakdown bitumen residues Remove contaminants 14 Strategy West Inc. 7
Oil Sands GHG Emissions In 2007, Canada s oil sands industry emitted 38 Mt of GHGs accounting for: Less than 5% of Canadian GHG emissions Less than 0.1% of global GHG emissions Source: Canadian Association of Petroleum Producers GHG Emissions Wells to Wheels Source: Alberta Energy Research Institute/Jacobs Consultancy; July 2009 Strategy West Inc. 8
Comparative Oil Sands Supply Outlooks 3,500 3,000 2,500 CAPP 2010 06 Growth CAPP 2010 06 Operating & In Construction SW 2010 07 ERCB 2010 06 Oil Supply (kb/d) 2,000 1,500 1,000 500 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Sources: CAPP; ERCB; NEB; Strategy West Inc.; July 2010 CAPP Canadian Crude Oil Supply Outlook 4,500 4,000 3,500 3,000 Oil Sands In Situ Oil Sands Mining E Canada W Canada Condensate W Canada Heavy W Canada L&M Oil Supply (kb/d) 2,500 2,000 1,500 1,000 500 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: CAPP; Crude Oil Forecast, Markets & Pipeline Expansions; June 2010 Strategy West Inc. 9
World s Largest Oil Producers Russia Saudi Arabia US Iran China Canada Mexico UAE Iraq Kuwait Venezuela Norway Nigeria Brazil Algeria Angola By 2020? Total World Oil Production in 2009 79,948 kb/d 0 2,000 4,000 6,000 8,000 10,000 12,000 2009 Oil Production (kb/d) Source: BP Statistical Review of World Energy; June 2010 Conclusions Canada s oil sands deposits are among the world s largest hydrocarbon accumulations. The oil sands industry is well established and making a significant contribution to global oil supply. The 2008/2009 financial crisis caused project deferrals and cancellations. Industry growth has resumed; however, the growth rate will depend on oil prices and how industry and government address the many challenges the industry faces. Strategy West Inc. 10
Thank You Questions? Please visit www.strategywest.com t t for oil sands project lists and other detailed oil sands industry information 21 Strategy West Inc. 11