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Canadian Oil Producers' Group Cuts Oil-Sands Production Forecast

A Canadian oil and gas trade group on Monday lowered its long-term outlook for oil-sands production by 400,000 barrels a day, or 7.7%, to 4.8 million barrels a day, citing higher costs and deferment of projects. The Canadian Association of Petroleum Producers also said overall oil production in Canada will likely rise from 3.5 million barrels a day in 2013 to 6.4 million barrels daily by 2030, which is 300,000 barrels below its forecast a year ago. The lowered estimate comes amid growing concern in Canadian industry and government circles that oil-sands output may be slowed by a lack of pipeline capacity and access to global markets beyond the U.S. "We really do need to see some of these [pipeline] projects get put in place over the next few years in order to enable this growth to happen," said Greg Stringham, vice president of oil sands and markets at […]

Posted On : Published By : Tom Whipple
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Oilmen Head to a Roundup in Calgary

Canada’s largest annual oil and gas trade show gets under way Tuesday in conjunction with an industry conference dedicated to heavy oil, which the country has in greater abundance than anywhere else on the planet. Anastasia Vasilakis Organizers estimate more than 60,000 attendees will flock here from around the world to visit nearly 2,000 corporate exhibitors’ booths at the Global Petroleum Show. Separately, some 1,100 participants are expected to register for the Society of Petroleum Engineers’ Heavy Oil Conference, a symposium for peer-reviewed technical papers. The focus of both events will be on business and technology innovations in the booming Canadian oil patch, but industry officials will also address an undercurrent of uncertainty about growth choke points. Looming large is opposition from environmentalists to the proposed Keystone XL pipeline to connect Alberta’s oil sands to Gulf Coast refineries. Increasing options for shipping out crude—by pipe, rail or barge—and […]

Posted On : Published By : Tom Whipple
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Canada’s Surprise Light Oil Boom Delights Oil Sands Producers

Canada is enjoying an unexpected boom in production of ultra-light crude known as condensate, defying long-held predictions of dwindling supply. This surprising bounty from one corner of Alberta, better known as the home to Canada’s vast tar-like oil sands reserves, is a boon for firms like Vermilion Energy Inc and Chevron who have built up positions in the Duvernay, now hotly tipped as one of North America’s most exciting shale plays with vast reserves waiting to be tapped. It also is fuelling hope of cost relief for traditional heavy oil sands companies such as Cenovus Energy Inc, who in the past have paid premiums of up to $25 a barrel to buy imported condensate used to dilute their viscous oil sands production so that it can flow through pipelines. The change in outlook has been abrupt. A year ago, the Canadian Association of […]

Posted On : Published By : Tom Whipple
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Canada's Surprise Light Oil Boom Delights Oil Sands Producers

Canada is enjoying an unexpected boom in production of ultra-light crude known as condensate, defying long-held predictions of dwindling supply. This surprising bounty from one corner of Alberta, better known as the home to Canada’s vast tar-like oil sands reserves, is a boon for firms like Vermilion Energy Inc and Chevron who have built up positions in the Duvernay, now hotly tipped as one of North America’s most exciting shale plays with vast reserves waiting to be tapped. It also is fuelling hope of cost relief for traditional heavy oil sands companies such as Cenovus Energy Inc, who in the past have paid premiums of up to $25 a barrel to buy imported condensate used to dilute their viscous oil sands production so that it can flow through pipelines. The change in outlook has been abrupt. A year ago, the Canadian Association of […]

Posted On : Published By : Tom Whipple
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Canada Aims to Sell Its Oil Beyond U.S.

The proposed Keystone XL pipeline would ship from oil fields in Alberta, Canada (above) to the Gulf of Mexico, but the project remains uncertain. The Washington Post/Getty Images Last fall, Canadian oil producer Husky Energy Inc. sent a batch of crude on a journey to India. It was just a drop in a sea of global oil transactions, but a step toward reshaping North American energy trading. The million-barrel shipment to Indian Oil Corp. , described by Husky as a test sale, foreshadowed what Canadian producers hope will become many new overseas markets for their oil. "We are doing it opportunistically to have the wheels greased" for more exports far afield if they become feasible, said Asim Ghosh, Husky’s chief executive. Recently, Husky also shipped a batch of oil to Italy’s Eni SpA. While the U.S. debates whether to loosen a decades-old prohibition on shipping its oil overseas, Canada […]

Posted On : Published By : Tom Whipple
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Canada Aims to Sell Its Oil Beyond U.S.

The proposed Keystone XL pipeline would ship from oil fields in Alberta, Canada (above) to the Gulf of Mexico, but the project remains uncertain. The Washington Post/Getty Images Last fall, Canadian oil producer Husky Energy Inc. sent a batch of crude on a journey to India. It was just a drop in a sea of global oil transactions, but a step toward reshaping North American energy trading. The million-barrel shipment to Indian Oil Corp. , described by Husky as a test sale, foreshadowed what Canadian producers hope will become many new overseas markets for their oil. "We are doing it opportunistically to have the wheels greased" for more exports far afield if they become feasible, said Asim Ghosh, Husky’s chief executive. Recently, Husky also shipped a batch of oil to Italy’s Eni SpA. While the U.S. debates whether to loosen a decades-old prohibition on shipping its oil overseas, Canada […]

Posted On : Published By : Tom Whipple
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2014: Peak Oil Sands Investment?

Does the shelving of the Total SA Joslyn mine signal that the recent wave of oil sands investment has peaked? This past week, Total SA And their business partners  decided to shelve the Joslyn Mine project , which places $11 bn in oil sands investment into the “unlikely” category. As an economist, I always look at other informal indicators of macroeconomic trends. Some other informal indicators are pointing to a crest in the recent wave of oil sands investment. – The price of diesel at the pump is approaching its 2007 levels, which raises variable costs for operating machinery. – Multiple fatalities in oil sands projects as S-A-F-E-T-Y is trumped by P-R-O-D-U-C-T-I-O-N. – Companies shedding contract employees, layoffs or hiring freezes as corporations regroup. – House flipping is back in Calgary as more people enter the market to sell $600,000 duplexes. – More frequent instances of rude wait staff […]

Posted On : Published By : Tom Whipple
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Hundreds of scientists to Canada PM: Pipeline report 'deeply flawed'

Hundreds of scientists have signed a letter sent to Canada’s prime minister blasting a federal review recommending the approval of the Northern Gateway  tar sands  pipeline as biased, Canadian media reported. Prime Minister Stephen Harper is expected to decide whether to approve the $7 billion pipeline, which will extend from Alberta to British Columbia, this month. “We urge you in the strongest possible terms to reject this report,”  the letter  said, adding that the study was based on a “flawed analysis of the risks and benefits to [British Columbia’s] environment and society.” Enbridge Energy’s 730-mile pipeline  would pump  525,000 barrels of Alberta tar sands oil every day on to 220 tankers annually in Kitimat on British Columbia’s northwest coast.  Many  indigenous groups  in Canada oppose the pipeline, as well as  environmentalists  concerned about the transport of tar sands oil to the pristine wilderness of British Columbia’s coast. They said […]

Posted On : Published By : Tom Whipple
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Hundreds of scientists to Canada PM: Pipeline report ‘deeply flawed’

Hundreds of scientists have signed a letter sent to Canada’s prime minister blasting a federal review recommending the approval of the Northern Gateway  tar sands  pipeline as biased, Canadian media reported. Prime Minister Stephen Harper is expected to decide whether to approve the $7 billion pipeline, which will extend from Alberta to British Columbia, this month. “We urge you in the strongest possible terms to reject this report,”  the letter  said, adding that the study was based on a “flawed analysis of the risks and benefits to [British Columbia’s] environment and society.” Enbridge Energy’s 730-mile pipeline  would pump  525,000 barrels of Alberta tar sands oil every day on to 220 tankers annually in Kitimat on British Columbia’s northwest coast.  Many  indigenous groups  in Canada oppose the pipeline, as well as  environmentalists  concerned about the transport of tar sands oil to the pristine wilderness of British Columbia’s coast. They said […]

Posted On : Published By : Tom Whipple
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Total Joslyn Oil-Sands Project Delayed, Jobs Cut on Costs

Total SA (FP) will cut 150 jobs at its Joslyn oil-sands project in Canada and delay a final investment decision as costs escalate and the company and partner Suncor Energy Inc. (SU) look for ways to make the project more profitable. “We just need to find ways to go further in cost effectiveness,” Andre Goffart, the president of Total’s Canadian business, said on a conference call yesterday. Oil-sands mining projects including the C$11 billion ($10.1 billion) Joslyn venture are “very capital intensive projects.” Oil-sands miners have struggled with rising costs in northern Alberta because of labor shortages and distance from equipment suppliers. Imperial Oil Ltd. (IMO) , the Calgary-based producer majority owned by Exxon Mobil Corp., last year boosted the cost of its Kearl project by 18 percent. The decision on Joslyn will save Total, France ’s largest oil producer, $3.9 billion in the next four years, Oswald Clint […]

Posted On : Published By : Tom Whipple