Wednesday, January 13, 2010

Canada OIl Sands Update

From SeekingAlpha:

The oil sands in Canada will see higher capital spending in 2010, as exploration and production companies start to restore spending on projects that were cut during the panic of 2009. Production from existing projects will also continue to increase during the year.

Production Expected To Ramp Up

....The Canadian Association of Petroleum Producers estimates that production from the oil sands will be approximately 1.8 million barrels per day by 2012, and 3.25 million barrels per day by 2020. This updated estimate incorporates cutbacks announced during the sharp drop in commodity prices and the recession.

Kearl Oil Sands Project
Imperial Oil (NYSE: IMO) recently announced that it would move forward with Phase I of the Kearl oil sands project. The first phase will have a capacity of 120,000 barrels per day, coming on line in 2012. Imperial Oil is 69.6% owned by Exxon Mobil (NYSE: XOM).

Firebag Project
Suncor Energy (NYSE: SU) also announced its 2010 capital expenditure plan, which contained $950 million in spending for phases 3 and 4 of its Firebag development. Each of these phases will have capacity of 68,000 barrels per day, and phase 3 will be on line in 2012. Other companies may also announce the restart or initiation of projects in 2010 as economic growth restarts.

One smaller cap company with leverage to activity in the oil sands is Oil States International (NYSE: OIS). The company's well site services segment provides lodging and other services to workers on site at projects.

This leverage to oil sands activity for Oil States International is highlighted by a recent contract announcement. The company received a contract to provide accommodation for the Kearl oil sands project, and it will expand capacity at its Wapasu Creek Lodge from 2,900 to 5,000 rooms.

Delayed Projects Restarting And Carrying On
Capital will continue to flow to various oil sands projects in Canada, as various companies carry on and restart projects that were delayed by the recession and credit crisis of the last two years. Source

New pipelines will support oil sands production

Canada will not allow Obama - Pelosi to bully it on oil sands

Canada's energy resources are vast and growing.  Faux environmentalists continue to focus on carbon hysteria as a way of denouncing oil sands development.  But energy starvation from misguided regulations and taxes would create far greater environmental devastation in the long run than a careful development of energy resources to support the economies of the most environmentally conscientious political entities the world has ever known.



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