Oil sands investment and cost trends: shedding the high cost stereotype?
The oil sands region has seen some of the largest reductions in US$ operating costs per barrel since the oil price fall. 2017 operating costs have reduced by 23% compared to our Q4 2014 outlook. Reductions in workforce labour, lower fuel gas prices and increased utilization have driven savings from 2014 - 17. Going forward, further reductions in operating costs are expected to be minimal. Several projects with significant amounts of sunk capital that were delayed in early 2015 have been re-sanctioned. The next wave of FID's will require higher oil prices, but operators have made significant strides in making new oil sands projects competitive at US$60 WTI.