Arab Today, arab today canadas oil sands determined to weather price plunge
Last Updated : GMT 18:54:03
Arab Today, arab today
Arab Today, arab today

Canada's oil sands determined to weather price plunge

Arab Today, arab today

Arab Today, arab today Canada's oil sands determined to weather price plunge

The Syncrude oil sands mine in Fort McMurray, Alberta
Calgary - AFP

Falling oil prices have slowed the phenomenal expansion of Canada's oil sands extraction trade but the industry remains optimistic it is only a temporary setback.

The price of oil fell $60 from June 2014 to January 2015, resulting in a massive budget deficit for the Canadian province of Alberta which will receive Can$7 billion (US$5.7 billion) less in energy royalties this year, forcing the local government to hike taxes and cut services for the first time in a generation.

It has been a tremendous shock for this oil-rich region after a decade-long boom that saw home prices soar, a new car in every driveway and jobs for everyone.

"The downturn has been brutal," said Brad Herald, vice-president of the Canadian Association of Petroleum Producers (CAPP).

Oil company executives initially expected the global energy slump to be temporary and oil prices to soon bounce back, but they now admit a return to prosperity could take longer than imagined, commented Robert Schulz, a professor of petroleum land management at the University of Calgary.

Herald acknowledged the initial forecasts were wrong.

However, he added: "We've seen ups and downs. If you look back at the past 30 years, we had five or six dips in the market, they all happened because of slightly different reasons but the fundamentals of supply and demand usually get restored."

In the meantime, the industry has been slimming its liabilities, laying off workers and putting new mega-projects on hold.
Over the past six months, Canadian firm Suncor shed 1,000 jobs in the Alberta oil sands. American firm ConocoPhilips and its partner Paris-based Total cut 200; China's Nexen slashed 350; and Anglo-Dutch group Shell announced 300 layoffs.

From September to February, a total of 20,000 jobs in the oil sands were lost, according to the Canadian government statistical agency.

"When companies are taking decisions on personnel, (firing people) is the last thing they want to do," Herald commented.

Total, meanwhile, has suspended development of two out of four oil sands bitumen deposits. Chief executive Laurent Maurel said the two on the chopping block were simply "not financially viable" at current oil prices.

In his Calgary office, surrounded by maps and geological surveys of the oil sands, however, he insisted that foreign interest in Canadian oil remains strong.

Each year, global oil reverses diminish "by 4.5 billion barrels per day, and new deposits must be mined or extracted to meet growing consumption," Maurel explained.

"The 2015 price of oil is irrelevant. What matters is what happens in the long term," he said.

Despite recent setbacks, he noted, Total remains committed to extracting 130,000 barrels of oil per day from the oil sands by 2018, representing five percent of the company's global output.

- Doubling production -

The petroleum industry has forecast new investment in the oil sands to fall this year by one-third, to Can$46 billion.

Long-term forecasts unveiled in February, however, point to a doubling of oil sands output to about six billion barrels per day by 2035. This year and next, the industry will likely see small increases of 150,000 barrels of oil per day, before it picks up.
The double whammy of low oil prices and a lengthy delay in obtaining US permits to build the Keystone XL pipeline connecting the oil sands to refineries in the US Gulf Coast, and other proposed pipelines to Atlantic and Pacific ports in order to reach foreign markets, are widely seen as minor obstacles that cannot hold back a nation hellbent on exploiting its natural resource wealth.

"When we announced Keystone in 2008, oil prices were below $40 per barrel. They rose to $100 and came down again, so we're less influenced by short terms spikes," said Mark Cooper, a spokesman for pipeline builder TransCanada.

"Our shippers will remain committed to Keystone."

Even as the sector struggles in landlocked Alberta, it is eyeing another potential new energy source offshore and further north.

The US Geological Survey thinks the Arctic seabed could hold 13 percent of the world's undiscovered oil and up to 30 percent of its hidden natural gas reserves.

Several Arctic oil exploration expeditions were recently suspended.

But Herald said: "The sector will remain interested in (the Arctic) for decades to come given the sheer size of the potential deposits."

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today canadas oil sands determined to weather price plunge Arab Today, arab today canadas oil sands determined to weather price plunge

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today canadas oil sands determined to weather price plunge Arab Today, arab today canadas oil sands determined to weather price plunge

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today EasyJet, Lufthansa among seven to bid

GMT 06:49 2017 Tuesday ,17 October

EasyJet, Lufthansa among seven to bid
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Fighters celebrate Raqa victory

GMT 06:07 2017 Wednesday ,18 October

Fighters celebrate Raqa victory
Arab Today, arab today Hiring not part of Alibaba pledge

GMT 11:26 2017 Wednesday ,18 October

Hiring not part of Alibaba pledge
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Sidem reveals plan to improve education

GMT 15:52 2017 Friday ,06 October

Sidem reveals plan to improve education
Arab Today, arab today British actress becomes fifth woman

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman
Arab Today, arab today Climate-disrupting volcanoes helped topple

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Britain's Vauxhall to cut 400 jobs

GMT 10:53 2017 Sunday ,15 October

Britain's Vauxhall to cut 400 jobs
Arab Today, arab today Dalal Abdel Aziz happy for “Seventh Neighbor”

GMT 09:31 2017 Monday ,16 October

Dalal Abdel Aziz happy for “Seventh Neighbor”
Arab Today, arab today Three killed, 360,000 without power

GMT 05:11 2017 Tuesday ,17 October

Three killed, 360,000 without power

GMT 12:33 2017 Friday ,13 October

Anoshka happy for reactions to her talk show

GMT 10:37 2017 Thursday ,12 October

Cara Delevingne accuses Weinstein

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 18:49 2017 Monday ,16 October

India to close colonial-era military farms

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 23:42 2017 Monday ,16 October

Better Marriages Make

GMT 07:02 2017 Sunday ,15 October

German minister sparks uproar

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 03:59 2017 Sunday ,15 October

US mobile carriers Sprint, T-Mobile to merge

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday