Insight
Surviving low oil prices in Canada's oil sands
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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.
Table of contents
- Executive summary
- Extracting a barrel of bitumen costs US$17-48/bbl
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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
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Downside price risk remains leaving exit strategies questionable
- Methodology and economic assumptions
- Additional project information
Tables and charts
This report includes 10 images and tables including:
- Surviving low oil prices in Canada's oil sands: Image 1
- Surviving low oil prices in Canada's oil sands: Image 3
- Surviving low oil prices in Canada's oil sands: Image 4
- Surviving low oil prices in Canada's oil sands: Image 5
- Surviving low oil prices in Canada's oil sands: Image 6
- Surviving low oil prices in Canada's oil sands: Image 2
- 2012 to 2014 project phases
- 2015 and 2016 project phases
- Company interest in commercial oil sands projects
- Wood Mackenzie's commercial oil sands projects
What's included
This report contains:
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