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Providing coverage of Alaska and northern Canada's oil and gas industry
June 2009

Vol. 14, No. 25 Week of June 21, 2009

Alberta bitumen production on the way up

Province’s energy regulator points to 131% increase over next decade to 3 million bpd; forecasts 36% drop in gas, excluding shale

By Gary Park

For Petroleum News

Alberta bitumen production will increase by 131 percent over the next decade to 3 million barrels per day, accounting for 88 percent of the province’s total oil output, the Energy Resources Conservation Board has predicted.

The regulator’s annual report takes a more bullish view of the long-term than the Canadian Association of Petroleum Producers, which estimated in late May that oil sands production could reach 2.2 million bpd in 2015 and 3.3 million bpd in 2025, based on a conservative scenario in which oil prices remain high enough to support developments and the world economy recovers.

Gas production in Alberta is forecast to make a steady, but relentless descent from 4.42 trillion cubic feet in 2008 to 2.8 tcf in 2018, with consumption in the province expected to grow from 33 percent of output last year to 58 percent in 2018 as demand for industrial use builds.

That raises questions about how much will be available for export to the United States, although the ERCB said that knowledge of shale gas potential in Alberta is “still quite limited,” with a number of projects at only the pilot stage or the initial point of development.

For now, the ERCB said it will not attempt to estimate what it believes are significant shale gas reserves while it monitors exploration and development activity.

Bitumen reserves 170B barrels

The province’s total remaining established bitumen reserves are placed at 170.4 billion barrels and conventional oil at 1.5 billion barrels.

Reserves at the end of 2008 were down marginally from a year earlier because of a reassessment of reserves and production during 2008.

Bitumen yielded an average 1.3 million bpd during the year, a decrease of 1 percent from 2007, reflecting an 8 percent drop in mined output to about 723,000 bpd, although output from in-situ projects rose 9 percent to about 584,000 bpd.

About 59 percent of the bitumen production was upgraded in Alberta, and synthetic crude production totaled almost 655,000 bpd — a number the ERCB expects will grow to 1.54 million bpd by 2018, depending partly on oil prices which the regulator anticipates will rise from an average US$55 per barrel this year to US$120 in 2018.

The province’s conventional oil production averaged 502,800 bpd last year, a drop of 3.8 percent from 2007.

Exploratory and development drilling along with enhanced oil recovery schemes contributed 130 million barrels to the reserves, replacing 77 percent of 2008 production.

Oil wells brought on stream in 2008 dropped fractionally to 1,738 last year from 1,745 in 2007 — a number the ERCB anticipates will fall sharply this year to 1,200.

Some positive gas showings

Although facing decline, Alberta’s conventional gas fields had some positive showings last year with established marketable reserves growing by 1 percent in 2008 to 37.8 tcf. Reserves added from drilling contributed 3.55 tcf, replacing 81 percent of production, while positive revisions to older reserves totaled 4.18 tcf, partly offset by negative revisions of 2.25 tcf.

The province has 7,907 conventional gas well connections last year, off 15 percent from 2007, and is expected to show a further drop to 6,800 this year.

Remaining established coalbed methane gas reserves were 1 tcf entering 2009, a gain of 141 billion cubic feet.

Coalbed methane production in 2008 averaged almost 600 million cubic feet per day, although hybrid wells contributed about 774 million cubic feet per day of both coalbed methane and conventional gas.

Coalbed methane well connections tallied 1,466 in 2008, compared with 2,465 wells in 2007, and are expected to stay almost flat this year at 1,400.






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