Category: Tar Sands

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 […]

Click here to view full article at online.wsj.com

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 […]

Click here to view full article at online.wsj.com

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 […]

Click here to view full article at peakoil.com

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 […]

Click here to view full article at www.bloomberg.com

The Canadian unit of France’s Total SA said Thursday it will halt its nearly decadelong development of a major oil sands project and lay off at least 100 local staff, a move that highlights the challenges of multibillion-dollar investments in unconventional sources of crude oil. A final investment decision on the roughly nine billion Canadian dollar (US$8.3 billion) project in northern Alberta, known as Joslyn North, has been pushed back indefinitely, the company said. Total received approval from the provincial government in 2011 and had envisioned starting production at the 157,000-barrel-a-day open-pit surface mine by 2020, according to recent filings. "Joslyn is facing the same challenge that most of the industry world-wide [faces]," Total E&P Canada President André Goffart told reporters on a conference call. ""The costs are continuing to inflate when the oil price—and specifically the netbacks for the oil sands—are remaining stable at best, thus squeezing […]

Click here to view full article at online.wsj.com

Norwegian energy company Statoil said Tuesday it wants to cut its carbon dioxide emissions from oil sands production, though there may be short-term spikes. Statoil operates oil sands production facilities primarily in Canada. It said its oil sands production declined "slightly" last year. The company said CO2 intensity should decrease as it introduces additional technology at its Leismer oil sands operations in Alberta, Canada. There may be spikes in the interim, however. The Norwegian company said in a report Tuesday about 69.7 kilograms of CO2 were produced per barrel of oil. That was higher than expected, the company said, but lower than the 72.7 kg of CO2 per barrel produced in 2011. "Our long-term CO2 targets for reduced carbon dioxide intensity in the production process, with 25 percent by 2020 and 40 percent by 2025, remain firm," Stale Tungesvik, Statoil’s manager in Canada, said in a statement . Tungesvik […]

Click here to view full article at www.upi.com

Researchers of an independent  report  on one of the largest ongoing oil releases in Alberta history say the provincial regulator and industry must do more to inform the public about the scale and impact of massive bitumen seepage in the oil sands. For nearly a year now, more than 12,000 barrels of bitumen mixed with water have seeped through several long cracks (some as long as 100 metres) in the forest floor near four wells owned by Canadian Natural Resources Ltd. (CNRL) in the Cold Lake region. To date, the Calgary-based company has spent nearly $40 million in cleanup operations that have involved the removal of 70,000 tonnes of earth. It also pumped 404,378 cubic metres of […]

Click here to view full article at www.resilience.org

Suncor Energy Inc. ‘s fourth-quarter results missed expectations, and it cut its outlook for production this year due to lower projected output overseas even as its oil-sands production hit a record high. Canada’s biggest oil and gas company by market capitalization also announced some shareholder-friendly moves, including a 15% increase in its quarterly dividend and an expanded share buyback. Suncor had fourth-quarter net income of 443 million Canadian dollars ($399 million), or 30 Canadian cents a share, compared with a loss of C$574 million, or 38 Canadian cents, a year earlier. Year-earlier results included an impairment charge of close to C$1.5 billion related to its Voyageur upgrader project in Alberta. The latest results included C$340 million in impairment charges and other items, mostly related to Suncor’s operational limbo in Libya and Syria. Operating earnings slipped 1.5% to C$973 million, or 66 Canadian cents a share, in the fourth […]

Click here to view full article at online.wsj.com

Canadian government analysts identified transportation as a major export uncertainty in the National Energy Board’s latest long-term supply and demand projections, but expect market forces to resolve the question, particularly for heavy oil , one of them told a Washington audience. “We don’t make specific assumptions about how it will be transported, although we see it moving by rail now to pipeline terminals,” said Abra Bhargava, who leads the Energy Integration Team at NEB’s Calgary headquarters, during a Dec. 6 presentation on the forecast at the Center for Strategic and International Studies. The analysts expect to take a closer look at long-distance rail transportation of diluted bitumen from Alberta’s oil sands in future forecasts, she said, adding, “We strongly believe the markets can function, and transportation will be found.” That assessment differs significantly from many US environmental organizations’ declarations that crude oil production from Alberta’s oil sands won’t grow […]

Click here to view full article at www.ogj.com

Asian investment in Canada’s oil sands sector, which plummeted this year, will gain momentum in 2014, with sovereign wealth funds rather than state- owned enterprises taking the lead, industry officials said late Wednesday. Total investments in Alberta’s oil sands sector totaled $30 billion in 2012 before falling to about $1 billion in 2013, according to the Canadian Association of Petroleum Producers. The decline followed a federal government investment guideline issued in late 2012 that restricted majority ownership of Canadian oil sands producers by foreign oil companies, barring “exceptional” circumstances, said Peter Glossop, a partner with Osler, Hoskin and Harcourt, at the 12th Annual Oil Sands Symposium in Calgary. December 7 will be the first anniversary of that announcement and what the industry has seen since is Asian state-owned enterprises, or SOEs, have stopped buying into Alberta’s oil sands sector, he said. “The word […]

Click here to view full article at www.platts.com

Canadian Natural Resources Ltd. (CNQ) said a 50,000-barrel-a-day oil-sands plant backed by the Alberta government will cost C$8.5 billion ($8 billion), almost 50 percent more than estimated previously, and be delayed. The startup date of the Sturgeon upgrader and refinery in Redwater, Alberta, will be pushed back to September 2017 from mid-2016. Both Canadian Natural and the Alberta government have agreed to inject further capital in the form of debt financing into the project, according to a company release. “The project remains a good deal for taxpayers,” Alberta Energy Minister Ken Hughes said in an e-mailed statement. “With the persistent discount on bitumen — the bitumen bubble — and equally persistent high prices for transportation fuels, we continue to expect a better return for Albertans’ barrels of bitumen through this enterprise than if we simply took the royalties in cash.” The Alberta government receives a portion of its oil […]

Click here to view full article at www.bloomberg.com

Introduction I spent the first week of November in the heart of the Athabasca oil sands around Fort McMurray, Alberta. I was there as a guest of the Canadian government, which hosts annual tours for small groups of journalists and energy analysts. In the previous two articles, I covered some of the environmental issues arising from the development of the oil sands. In  Oil Sands and the Environment – Part I  I discussed greenhouse gas emissions, impacts on wildlife, and I touched upon water usage. I also detailed some of the work of  Pembina Institute  (PI), which is working to improve the environmental conditions as the oil sands are developed. In Oil Sands and the Environment – Part II  I covered the tailings ponds, water consumption, impacts to water quality, and impacts to indigenous people. Today I want to discuss the actual process of […]

Click here to view full article at peakoil.com

Cenovus Energy Inc. aims to bring methods more common to the factory floor to Alberta’s oil sands in a bid to cut costs per barrel by up to half and double production in less than a decade. “What we want to do is take manufacturing techniques, where we use the same template over and over again, for [building] mostly the same surface facilities” for equipment needed to extract oil from deep underground, Chief Executive Brian Ferguson […]

Click here to view full article at online.wsj.com

Cenovus Energy Inc. aims to bring methods more common to the factory floor to Alberta’s oil sands in a bid to cut costs per barrel by up to half and double production in less than a decade. “What we want to do is take manufacturing techniques, where we use the same template over and over again, for [building] mostly the same surface facilities” for equipment needed to extract oil from deep underground, Chief Executive Brian Ferguson […]

Click here to view full article at online.wsj.com

Suncor Energy, Canada’s top petroleum producer, announced on Thursday that it would expand its oil production in 2014 by 10 percent in another sign that the Obama administration’s delay in approving the Keystone XL pipeline extension is not holding back growth in the western Canadian oil sands fields. “We’re set for a strong year of continued production,” Suncor’s chief executive, Steven W. Williams, said. The company announced a capital spending program of $7.45 billion for 2014, $477 million more than it had forecast earlier this year. Suncor, which is based in Calgary, produces oil and gas around Canada, and has operations in North Africa and the North Sea. But its oil sands operations are the main driver for the company. In the most recent quarter, its oil sands output rose 16 percent from the year before for a record of 396,000 barrels a day, nearly 20 percent of the […]

Click here to view full article at www.nytimes.com

THE HAGUE, Netherlands, Oct. 31 (UPI) — Royal Dutch Shell said Thursday it was moving ahead with a project in Alberta, Canada, expected to produce 80,000 barrels of oil per day. “I’m pleased we’re moving ahead with this important project,” Lorraine Mitchelmore, a vice president in charge of heavy oil developments, said in a statement. “Our decision to invest in Carmon Creek has been carefully studied with the goal of designing a project that is competitive from a commercial, technological and environmental perspective.” Shell owns a 100 percent stake in the Carmon Creek facility. Heavier grades of Canadian oil are too thick to flow naturally so Shell will use a steam injection system to heat the oil and reduce its viscosity. “Once the project is up and running the aim is to virtually eliminate the need for freshwater use for steam generation through recycling of water produced with the […]

Click here to view full article at www.upi.com

REUTERS By Daniel Gilbert Exxon Mobil Corp.’s ambition of boosting production depends in large part on wringing more crude from the oil sands of Western Canada. One challenge: Getting that crude to market to get paid. With room on Canadian oil pipelines in short supply, and the future of the proposed Keystone XL project in doubt , Exxon is considering building a rail terminal in Edmonton, Alberta to haul crude into the U.S. on trains, a company executive said on Thursday. “We are looking at a number of logistical opportunities that we have,” David Rosenthal, Exxon’s head of investor relations, said of routes out of the oil sands, including Keystone XL. “But, as would be prudent, we are looking at other options” like the rail terminal. Some big refiners have pooh-poohed the importance of TransCanada Corp.’s Keystone XL pipeline expansion, which would carry crude to the hub of refineries […]

Click here to view full article at blogs.wsj.com

HOUSTON — Over the past two years, environmentalists have chained themselves to the White House fence and otherwise coalesced around stopping the Keystone XL pipeline as their top priority in the fight against global warming. But even if President Obama rejects the pipeline, it might not matter much. Oil companies are already building rail terminals to deliver oil from western Canada to the United States, and even to Asia. Since July, plans have been announced for three large loading terminals in western Canada with the combined capacity of 350,000 barrels a day — equivalent to roughly 40 percent of the capacity of the proposed Keystone XL pipeline that is designed to bring oil from western Alberta to refineries along the Gulf Coast. Over all, Canada is poised to quadruple its rail-loading capacity over the next few years to as much as 900,000 barrels a day, up from 180,000 today. […]

Click here to view full article at www.nytimes.com

Suncor Energy Inc. (SU) , Canada’s largest energy company by market value, will proceed with the C$13.5 billion ($12.9 billion) Fort Hills oil sands project as it seeks to increase production. The venture with Total SA (FP) and Teck Resources Ltd. (TCK/B) will begin producing crude in 2017, adding 180,000 barrels a day of output in northern Alberta , the company said yesterday in a statement. Calgary-based Suncor’s share of the costs will be C$5.5 billion. The approval comes after Chief Executive Officer Steve Williams earlier this year canceled another venture with Total in a bid to reduce costs and boost profitability. Fort Hills, which had initially been slated to start in 2016, has 3.3 billion barrels of reserves and will produce oil for about 50 years, the company said. “This project will be a significant source of long-term cash flow for the company and contribute strong returns for […]

Click here to view full article at www.bloomberg.com