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Cnooc Oil-Sands Spill Worsens Outlook for Canada Pipeline Plans

Crews clean an oil spill at Nexen Energy’s Long Lake facility near Fort McMurray on July 22, 2015. Photographer: Jeff McIntosh/The Canadian Press via AP It’s becoming increasingly difficult to get oil-sands pipeline projects off the ground, and Alberta’s worst spill since 1980 will probably make it tougher. A rupture in a line operated by Nexen, a unit of China’s Cnooc Ltd., spewed 31,500 barrels of bitumen, waste water and sand into the bog-like muskeg of the province’s north this month, igniting outrage from communities along pipeline routes. The crude in the slurry would be enough to make gasoline to fill up about 15,000 cars. The leak is bolstering opposition that has stalled every major crude export project from Canada in recent years and may lead to more stringent regulations. The delays to multibillion-dollar pipelines such as TransCanada Corp.’s Keystone XL are threatening output growth and have led producers […]

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Canada expects gas production lift

Canadian regulator expects initial shale gas production rates to increase through 2017 in western parts of the country. Photo by Steve Oehlenschlager/Shutterstock CALGARY, Alberta, July 23 (UPI) — Technological improvements in drilling into natural gas basins in Western Canada means initial production rates should increase through 2017, a regulator said. The National Energy Board said average initial production rates in gas basins in the area declined from 2000 to 2006 as most operators focused on conventional deposits. Since 2007, operators have started focusing on reserves locked in shale basins , which are harder to exploit. "Because these tight and shale formations tend to have higher initial production rates than the mature conventional resources of the Western Canada Sedimentary Basin, the overall average initial production rates started increasing," the NEB said in a report. "This upward trend to all initial production rates is expected to continue through 2017." A forecast […]

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Jobs Machine From Canada Oil Slows as Robots Add to Price Slump

Truck driver Craig Huzulak is unemployed after losing his job four times since December — the new normal in a Canadian oil patch still reeling from a downturn. Huzulak, 49, was working at a mine last year near Fort McMurray, Alberta, when crude prices plunged and work dried up. He lost two more positions in the following months and then had a job offer yanked at the end of June before he could even start. In addition to the market rout, the father of two now worries about the self-driving trucks Suncor Energy Inc. is rolling out in its oil-sands mining operations that will replace workers like him to save companies money. “It’s really, really hard for heavy-equipment operators,” said Huzulak, who has driven trucks and worked on drilling rigs in Western Canada for 15 years. “There’s a lot more fear now that this might last longer.” The burgeoning […]

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How a Chinese Company Slipped on Canada’s Oil Sands

Weeks after the state-controlled oil company bought Nexen for $15 billion, its executives were in Calgary with a blunt message for the Canadian company, which had struggled for years to extract crude from the oil sands in the Alberta wilderness. Cnooc Chief Executive Li Fanrong told staffers Nexen provided just 2% of Cnooc’s profits, say attendees, warning that “2% is not enough.” Two years later, Cnooc is still trying to fix Nexen, its troubles compounded by low crude prices. And now Cnooc must explain an oil spill: This month, a pipeline Nexen installed last year ruptured, spilling nearly 31,500 barrels of a mixture of crude oil, wastewater and sand in northern Alberta. Nexen’s chief executive, Fang Zhi, on Wednesday stood by the oil-spill site near the hamlet of Anzac. “It is very disappointing that this has happened,” he said, the scent of petroleum wafting. “I therefore personally apologize.” Buying […]

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Falling Crude Prices Upend Canada’s Oil Sands Projects

Two years ago Canadian oil sands producer Cenovus Energy Inc., CVE -2.54 % buoyed by success at its flagship project and eager to cut operating expenses, halved the amount of instrumentation used to measure finicky temperature and pressure at its wells. But that turned out to be a costly mistake that cut into its Foster Creek site’s production volumes, which only have recently recovered after the company reversed course. “We started to cut our operating costs, but in hindsight that’s a lesson learned,” Harbir Chhina, Cenovus’ executive vice president in charge of oil sands, said in an interview. “If I compare the oil sands to a baseball game, I think we just finished the first inning,” he said. Of the roughly two million barrels a day that Canada currently produces from its oil sands, about half is mined from the surface using giant excavators and the world’s tallest dump […]

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Alberta pipeline breach causes massive spill

China-subsidiary company apologizes, says cleanup underway for one of North America’s largest-ever oil spills on land Nexen Energy apologized Friday for an oil sands pipeline leak in the Canadian province of Alberta that is one of North America’s largest-ever oil-related spills on land, and said its cleanup crews were working around the clock. The pipeline leaked 31,500 barrels of emulsion — a mixture of bitumen, water and sand, the equivalent of 5 million liters of tar sands oil, or 1.3 million gallons. Nexen, a subsidiary of China’s CNOOC Ltd., said it is still trying to find the root cause of the leak in the new pipeline, which was installed last year. The company has found a visible breach about the size of a hand. The incident is another blow for the environmental record of the oil sands industry, already under fire from activists for its carbon-intensive production process. Ron […]

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Canada Provinces Agree To Strategy On Pipelines, Climate Change

OTTAWA, July 17 (Reuters) – Canada’s provinces reached a long-sought deal on Friday over an energy plan for the country, agreeing broadly to curb greenhouse gas emissions while also promoting the use of pipelines. The oil-producing province of Alberta originally conceived the strategy as a way to ensure that it could move its fuel to market. The plan was changed at the insistence of some of the provinces to reflect their desire to fight climate change. Alberta and Saskatchewan have limited markets for their land-locked oil, with environmentalists opposing pipelines that have to go through other provinces to reach the Pacific or Atlantic oceans. These include the Energy East pipeline proposed by TransCanada Corp, which is also trying to build the controversial Keystone XL pipeline through the United States. Canada’s provinces agreed to ensure that regional, Canadian and international infrastructure exists for sending energy products to domestic and international […]

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Canada set energy sector records last year

Federal regulator’s report points to strong 2014 for energy sector, though industry groups less optimistic in their 2015 forecasts. Image courtesy of the National Energy Board. CALGARY, Alberta, July 16 (UPI) — A federal Canadian report on the energy sector pointed to a strong 2014, though industry groups this year suggest rough waters are ahead in a weak oil market. The National Energy Board, the federal regulator, released a report on full-year 2014 production . Though crude oil prices fell roughly 50 percent from June 2014 to year’s end, the NEB said the energy sector was resilient and export revenue of $100 billion set a record. Total Canadian crude oil production in 2014 increased by 7.9 percent year-on-year to around 3.75 million barrels per day. "This growth is largely attributed to increased oil sands production, including several new in situ bitumen projects coming on-line and increased tight oil production […]

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To Clean Up Oil Sands’ Dirty Image, Alberta May Try Emission Tax

Alberta’s new government is engaged in a balancing act. It’s trying to cut carbon emissions while protecting an oil-sands industry that supports hundreds of thousands of jobs. Tar sands are found almost exclusively in the western Canadian province. They produce a product that generates about 17 percent more carbon dioxide on average than conventional oil, and emissions in Alberta have risen by more than 53 percent since 1990. At the same time, they’re the nation’s single most valuable export, making up nearly a fifth of total foreign sales. The challenge for the government is to work with an industry, already struggling with price cuts, on ways to hold off environmental criticism of the tar sands. Opponents have so far blocked the Keystone XL pipeline that would carry the oil to the U.S., and limited the world’s third-largest reserve from reaching new buyers. “If Alberta wants better access to world […]

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Canadian imports of US crude hit fresh highs in May: Statistics Canada

Canada imported a record 573,400 b/d of US crude in May, Statistics Canada data showed. As US crude exports are heavily restricted, the lion’s share of US exports often go to Canada as much of the refined product produced eventually feeds into US Northeast demand. Canada has four refineries on its East Coast: Irving Oil’s 300,000 b/d Saint John facility in New Brunswick; Harvest Operations’ 115,000 b/d Come By Chance refinery in Newfoundland and Labrador; and Valero’s 265,000 b/d Jean Gaulin refinery and Suncor’s 137,000 b/d Montreal refinery, both in Quebec. While these refineries traditionally take Atlantic Basin crudes — including offshore Canadian production — they have recently been sourcing more and more barrels from Texas, and increasingly North Dakota and Wyoming as well, Statistics Canada data shows. Article continues below… Crude Oil Marketwire delivers vital intelligence to help you make critical decisions. Delivered daily direct to your desktop, […]

Posted On : Published By : Tom Whipple