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9 Pages

Surviving low oil prices in Canada's oil sands


Surviving low oil prices in Canada's oil sands

Report summary

The operating cost of extracting bitumen in Canada's oil sands tops out at US$37/bbl for in-situ projects and US$40/bbl for mining projects. It is amongst the highest of all project types globally. With low oil prices, companies will see oil sands cash flows fall by US$21 billion in 2015 and 2016 combined. We calculate that over US$35 billion of remaining present value has evaporated in the region. Regardless the oil sands remain viable and hold considerable long-term value.


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This report includes 2 file(s)

  • Surviving low oil prices in Canada's oil sands PDF - 367.57 KB 9 Pages, 0 Tables, 10 Figures
  • Surviving low oil prices in Canada's oil sands.xls XLS - 196.00 KB

Description

This Upstream Oil and Gas Insight report highlights the key issues surrounding this topic, and draws out the key implications for those involved.

This report helps participants, suppliers and advisors understand trends, risks and issues within the upstream oil and gas industry. It gives you an expert point of view to support informed decision making.

Wood Mackenzie's 500 dedicated analysts are located in the markets they cover. They produce forward-looking analysis at both country and asset level across the globe, backed by our robust proprietary database of trusted research.

Proprietary data means a superior level of analysis that is simply not available anywhere else. Wood Mackenzie is the recognised gold standard in upstream commercial data and analysis.

  • Executive summary
  • Extracting a barrel of bitumen costs US$17-48/bbl
  • Company cash flows in 2015 and 2016 are materially reduced
    • Large companies are in charge
    • Medium companies take cover
    • Small companies seek strategic alternatives
    • Investment will slow
  • Production growth protected as bulk of capex is sunk
    • No oil sands shut-ins
    • Near-term production continues to grow
    • Projects with limited sunk capital are at risk
  • The oil sands remain viable long-term
  • Downside price risk remains leaving exit strategies questionable
    • Methodology and economic assumptions
    • Additional project information

In this report there are 10 tables or charts, including:

  • Executive summary
  • Extracting a barrel of bitumen costs US$17-48/bbl
    • Surviving low oil prices in Canada's oil sands: Image 1
  • Company cash flows in 2015 and 2016 are materially reduced
    • Surviving low oil prices in Canada's oil sands: Image 2
  • Production growth protected as bulk of capex is sunk
    • Surviving low oil prices in Canada's oil sands: Image 3
  • The oil sands remain viable long-term
    • Surviving low oil prices in Canada's oil sands: Image 4
    • Surviving low oil prices in Canada's oil sands: Image 5
  • Downside price risk remains leaving exit strategies questionable
    • Surviving low oil prices in Canada's oil sands: Image 6
    • 2012 to 2014 project phases
    • 2015 and 2016 project phases
    • Company interest in commercial oil sands projects
    • Wood Mackenzie's commercial oil sands projects
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