Canada s Oil & Natural Gas Market Access The Key to Future Growth Calgary Real Estate Forum October 29, 2013 Enabling Responsible Development 2
Canadian Oil Sands Source: Cenovus Global Crude Oil Reserves by Country billion barrels 300 250 200 150 100 298 265 Includes 169 billion barrels of oil sands reserves 173 155 141 102 92 World Oil Reserves 80 Restricted (81%) Open to Private Sector Open to Private Sector Oil Sands 56% Other 44% 50 48 37 30 26 25 21 0 Venezuela Saudi Arabia Canada Iran Iraq Kuwait Abu Dhabi Russia Libya Nigeria Kazhakhstan China Qatar United States 4 Source: Oil & Gas Journal Dec. 2012
Canadian Oil Sands (Bitumen and SCO) & Conventional Production 5 Access to Markets Pipeline Expansions in Development
2012 Canada and U.S. Demand for Crude Oil by Source Thousand Barrels per Day 7 Changing Global Oil Import Needs 14 Net oil imports in the New Policies Scenario mmb/d 12 10 8 6 4 2 2005 2011 2020 2035 0 China India European Union United States Japan Korea Source: IEA World Energy Outlook 2012, EIA 8
WCSB Takeaway vs Supply Forecast 9 Crude Oil Rail Exports Western Canada vs. North Dakota Opportunities: Relatively quick Flexibility Less diluent Use in both directions Challenges: Recent safety Higher costs Limited loading and tank car availability Source: Peters & Co. Limited = Sept 2013 10
Environmental Performance 11 Production COSIA GHG emissions Water oil sands/tight oil Land/tailings Pipelines Integrity & operations Marine Prevention, response and recovery tankers/ports Regulation and Monitoring Enhanced oil sands monitoring more sites, more transparency Up to $50M/yr paid by industry The Oil Sands GHG Emissions Challenge Improving to at least the emissions of Similar Crudes U.S. Barrel Refined in the U.S. (2005) Venezuela - Petrozuata US -Kern River Cdn Oil Sands: Mining SCO Nigeria - Bonny Light Canadian Oil Sands: SAGD Dilbit Iraq-Basra Light Cdn Oil Sands: Low SOR SAGD Dilbit US - Mars +5% Venezuela Bachaquero Mexico - Maya Cdn Oil Sands: Mining Dilbit (PFT) Iraq - Kirkuk Blend US Barrel Refined in the U.S. (2005) Saudi Arabia - Arab Light Brazil - Tupi North Sea - Forties +2% Well-to-tank Refined product Combustion 0 100 200 300 400 500 600 kgco 2 e per barrel of refined product Source: IHSCERA Oil Sands Dialogue Getting the Numbers Right 2012 12
Canadian Natural Gas 13 North American Unconventional Gas Resources 14
Current Disposition of W. Canada s Natural Gas Production (2012) Westcoast ANG/ Foothills TransCanada Alberta (NGTL) Alliance TransCanada Transmission Mainline Northwest Foothills East M&NE 1.1 bcf/d TQ&M PGT Northwest Great West Northern Lakes 2.5 bcf/d Border Iroquois PNGTS PG&E Kern River CNG Trailblazer Algonquin ANR Mid West NGPL Panhandle Transwestern 4.8 bcf/d Texas SoCal ANR El Paso NGPL Eastern El Paso Domestic 5.3 bcf/d Vector Transcontinental 15 Natural Gas Market Opportunities LNG for export Oil Sands growth Gas-fired power and cogeneration Vehicles CNG/LNG Oil Sands 20.3% NATURAL GAS DEMAND BY SECTOR - 2035 Industrial 21.5% LNG 19.2% Residential 13.3% Vehicles 0.2% Electricity Generation 13.4% Commercial 12.1% Source: The Conference Board of Canada December 2012 16
Imports to Asian Economies with Growing Natural Gas Requirements (Bcf/d) 50 45 40 35 30 25 20 15 10 5 0 Growth of 27 Bcfd or 167% 2010 2015 2020 2025 2030 2035 2040 China Taiwan India South Korea Japan 17 Source: EIA 2013 International Energy Outlook, Press reports, CAPP Asian Markets Represent an Attractive Export Option 2012 Japanese LNG Price $/MMbtu
Canadian LNG export projects in development Kitimat LNG (Chevron, Apache) 1.4 Bcf/d Permits received; awaiting investment decision BC LNG Export Co-operative 0.125 Bcf/d Permits received LNG Canada (Shell, KOGAS, Mitsubishi, PetroChina) 2.0 3.2 Bcf/d Feasibility stage; applied for some permits Pacific Northwest LNG (Progress/Petronas, Japex) 2.0 Bcf/d (Merger approval granted) Completed feasibility, progressing to pre-feed Nexen/Inpex Conducting feasibility Prince Rupert LNG (BG Group) 3.0 Bcf/d Advancing feasibility, applying for permits AltaGas/Idemitsu Kosan 0.27 Bcf/d Conducting feasibility ExxonMobil/Imperial Oil (WCC LNG Ltd) 4.0 Bcf/d Applied for export licence Woodfibre LNG 0.3 Bcfd Applied for export licence Expressions of interest to proceed with a project have also been made by; Woodside Petroleum & South Korea E&S 19 Total potential new demand ~ 13.0 Bcf/d Canadian Production Market Constrained Case and New Market Opportunity Case Market Constrained Case Eastern Canada CBM New Market Opportunity Case Western Canada Unconventional Western Canada Conventional 20
Key Indicators Market Access for Oil Decision or delay on Keystone XL Final Environmental Impact Statement State Dept. Decision on Enbridge Northern Gateway pipeline NEB/JRP decision by end of 2013 Decision on reversal of Enbridge Line 9 to Eastern Canada Reversal of existing pipeline - currently in hearing Discussions to address BC s 5 Conditions for oil pipelines Applications for Trans Mountain and Energy East pipelines Rail safety, loading terminals, tank cars Market Access for Natural Gas Announcement of decisions to proceed with LNG projects in BC US policy decision/approvals for US LNG facilities US GHG policy for existing coal plants 21