Caught in numbers crunch
Playing in the oil sands is a ‘big boy’s game’ as production costs exceed the oil price for smaller companies at US$40 per barrel
For Petroleum News
The oil sands of Alberta are living proof of the old adage: The bigger they are the harder they fall. Even faster than they grew from a marginal resource to a key element in North America’s energy future, attracting capital spending estimates of C$317 billion over the next 22 years, the oil sands have gone into a tailspin, induced by the collapse of oil prices that did more damage in a few months than years of cost overruns, shortages of construction labor and materials and the threat of harsh climate-change measures. Petroleum News’ Canadian correspondent Gary Park examines the fallout from a drastically revised oil sands agenda and the chances of a recovery in a two-part series.
The economics of operating in the oil sands these days can be described in one word: They stink.
Producers of heavy oil, which accounts for 38 percent or 1.05 million barrels per day of Canada’s total oil output (nearly 570,000 bpd from the oil sands and the rest conventionally produced) and all of....
[additional news subjects in this story]
What will emerge from rubble?
C$101 sustained WTI needed
Operating costs could drop
What would restore cuts?
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