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Title:牋燙anada ISA Canadas Oil and Gas Sector
Report Type:牋Planned Market Research
ITA Industry Code:燨GM
Contacts:牋Sharon Atkins, Sr. Commercial Specialist, CS Calgary
Date:牋燤ay 31, 2005
CANADAS OIL AND GAS INDUSTRY OVERVIEW
INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND
U.S. DEPARTMENT OF STATE 2005. ALL RIGHTS RESERVED OUTSIDE OF
THE UNITED STATES.
Petro Canada
Drilling Rig
Near
Cochrane, Alberta, Canada
With the price of oil over $50 per barrel and gas at $6.30 per cubic
meter, Canadas abundant energy sector is booming. Ample opportunity
exist for American suppliers, and the U.S. Commercial Service stands
ready to advise and assist companies looking to export to Canada and
beyond.
Summary
Canada is the world's third largest producer of natural gas and the
seventh largest producer of crude oil. Its oil production comes 36 percent
from oil sands, seven percent East Coast offshore operations, and the
balance in traditional drill and gush operations. Undeveloped energy
resources include major crude oil and natural gas deposits in offshore
areas in the north, gas reserves in the Yukon and Northwest Territories,
and massive reserves of oil sands in Alberta. The upstream petroleum
industry is active in 11 of the 13 provinces and territories. The building
of the $4 billion Mackenzie gas project promises massive gas production
from Canada's north by 2010.
Confident Canadian
producers are drilling at record levels, 23,920 wells in 2004 and an
anticipated 25,000 in 2005. Sustained high oil and gas prices, together
with the hunt for natural gas supplies are driving the growth.
Market Overview
In 2004, producers
are expected to invest over US$20 billion on exploration, development
and field equipment. In excess of 80 percent of the spending will be
in the Province of Alberta on conventional and oil sands development.
Significant amounts will also be spent in British Columbia (BC) due
to the discovery of a world-class natural gas field in north eastern
BC, and on offshore activity in Canada's maritime provinces, primarily
Newfoundland and Labrador.
With increased demand and price strength, experts forecast the market
for oil and gas field machinery to increase by four percent through
2005 and total market size will reach $6 billion. Traditionally imports
from the U.S. amount to approximately 90 percent of the total import
market; in 2004 they are estimated to have reached $3.3 billion.
U.S. products in the sector are recognized for their excellent quality,
technological benefits and reputable after-sales-service. Promising
sub sectors include drilling equipment and well monitoring technology
as well as drill pipe for oil and gas drilling and boring and sinking
machinery
Oil and Gas Field Machinery Stats:
2002
2003
2004 (estimated)
Total Market Size
4,999
5,450
6,081
Total Local Production
3,203
3,494
3,820
Total Exports
1,017
1,110
1,280
Total Imports
2,810
3,066
3,541
Imports from the U.S.
2,449
2,726
3,285
(The above statistics are unofficial estimates)
2004
Industry Statistics:
(source CAPP Canadian Association of Petroleum Producers)
Capital Spending:燙onventional牋$20.5 billion
Oil Sands牋$ 4.8 billion
Wells Drilled:牋Oil牋牋 4,700
Natural Gas牋16,000
Total牋23,920 (including dry and service)
Production:牋Conventional Oil1,409,000 barrels per day
Surface Mining牋 465,000 barrels per day
In-situ bitumen牋 532,000 barrels per day
Pentanes plus/
Condensate牋牋 163,000 barrels per day
Crude Oil 牋2,569,000 barrels per day
Natural Gas牋17.4 billion cubic feet per day
Industry Revenues:牋牋$68 billion
Exports:牋Crude Oil牋1,611,000 barrels per day
Natural Gas牋7.4 billion cubic feet per day
Refineries:牋Number:牋20
Capacity:牋1,960,000 barrels per day
The Oilsands of Alberta
View of the Alberta Oilsands
Largest Truck in the World
23 Feet High
Tires are 12 feet tall!
Up to 400-ton capacity!
Gas Tank Holds 1800 Gallons
In 2005 production from Canadas oil sands will exceed one million
barrels per day and is forecast to increase to 2.5 million by 2015.
Oil sand reserves are in excess of 175 billion barrels of recoverable
oil and using current technology, this resource is second only to those
in Saudi Arabia.
According the CAPP, capital spending totaled more than $28 billion
from 1996 to 2004, and Canadian companies will spend close to $7 billion
on oil sands capital investments in 2005. There are 35 projects
in the planning or expansion process.
Suncors
Oilsands Facility
Oil Sands Potential by Project
Company燩roject Name牋Volume (bpd)牋Year牋Cost
(000)牋牋($B)
Suncor牋燜irebag Voyageur牋550牋2012牋5.4
Shell/Chevron/
Western牋Upgrader Jackpine牋525牋2013牋3.5
Syncrude牋Aurora Mine/Upgrader455牋2009牋4.3
Husky/Imperial燢earl Lake牋250牋2012牋3.3
Imperial牋Cold Lake牋225牋2010牋1.4
CNRL牋燞orizon牋225牋2011牋5.4
True North Energy燜ort Hills牋190牋2008牋2.4
SynEnCo牋Northern Lights牋150牋2011牋2.7
CNRL牋燱olf Lake Primrose牋120牋2010牋0.9
Encana牋Foster Creek牋100牋2007牋1.1
Conoco (Gulf)牋Surmont牋100牋2010牋0.8
ExxonMobil牋Kearl Lake牋100牋2005牋2.2
Petro-Canada牋Meadow Creek牋 80牋2007牋0.5
Encana牋Christine Lake牋 70牋2008牋0.4
OPTI-Nexen牋Long Lake牋 70牋2008牋1.6
Petro-Canada牋Lewis Creek牋 60牋2010牋0.5
JACOS牋Hangingstone牋 50牋2008牋2.7
Petro-Canada牋Mackay River牋 30牋2003牋0.2
Black Rock牋Orion EOR牋 30牋2007牋2.7
Deer Creek牋Deer Creek牋 30牋2006牋0.2
Husky牋燭ucker Lake牋 30牋2005牋3.4
Rio Alto牋Kirby牋牋 30牋2006牋2.7
Devon牋燚over牋牋 10牋2006牋0.7
TOTAL牋牋牋3,480牋牋49牋牋
Specific opportunities identified by industry sources include:
a shortage of diluents
any lighter hydrocarbon, such as pentanes plus,
added to heavy oil or bitumen in order to facilitate pipeline tr