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Oil sands resources get more global recognition IMF includes sands as part of oil reserves; BP Statistical Review accepts some; Standard & Poor’s warns of credit risk Gary Park Petroleum News Calgary Correspondent
The International Monetary Fund is next in line to include the Alberta oil sands as part of the global oil reserves, but the Alberta government’s struggle for formal recognition is far from won.
Energy Minister Greg Melchin told a Washington, D.C., audience the International Monetary Fund has agreed to add 175 billion barrels of oil sands resources in its reporting, joining the U.S. Energy Information Administration and the Oil & Gas Journal.
Adding 175 billion barrels to its conventional reserves of 5 billion barrels vaults Canada to second place behind Saudi Arabia, opening the door to a greater influx of international capital.
But there are as many bears as bulls when it comes to the oil sands potential.
The New York Times said the reserves claims are far from scientific, arguing the assessment “was promoted by a Canadian energy trade group (the Canadian Association of Petroleum Producers) and, upon further examination, turned out to be highly questionable.”
Standard & Poor’s Rating Services warned that E&P firms looking to boost reserves from big-ticket oil sands projects should be wary of the risks such projects could pose to credit ratings.
BP, in its Statistical Review of World Energy last year would credit only 11 billion barrels of the deposits — limiting the total to reserves under active development. Alberta ‘geological jackpot’ Undeterred, Melchin said IMF recognition would give added momentum to a growing acceptance that the oil sands are commercially viable.
“There is hardly a square inch of (Alberta) that doesn’t have the potential for development,” he told a North American energy security seminar sponsored by the Center for Strategic and International Studies. “The landscape is truly a geological jackpot.”
Given projections of a tripling to 3 million barrels per day in oil sands production over the next decade, Melchin emphasized the importance of Canada and the United States building a strong energy relationship.
Although China is taking its first steps to secure some oil sands production “clearly American investment remains the largest … and we clearly welcome that,” he said.
Energy Information Administration Administrator Guy Caruso said his agency expects “very robust growth” in the oil sands.
But this is no time for complacency in the oil sands sector, according to the London-based Oil Depletion Analysis Center, which suggested Canada must move more quickly to take advantage of declining production and the lack of big discoveries.
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