Canada Oil & Gas Report Q3 2012
Business Monitor International, June 2012, Pages: 98
The Canada Oil and Gas Report provides industry professionals and strategists, corporate analysts, oil and gas associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Canada's oil and gas industry.
BMI View: Production from oil sands will continue to drive Canada’s oil production growth. However, exploration in Canada’s offshore acreage and unconventional resources could prove-up more oil and gas reserves to support the country’s long-term growth prospects. The outlook for Canada’s oil and gas industry is still a rosy one, though Canada’s upstream potential needs more support from infrastructure development.
The main trends and developments we highlight for Canada’s Oil and Gas sector are:
- Oil production growth will be mainly driven by production from Canada’s oil sands, as projects including ConocoPhilips and Total’s Surmount and Total’s Joslyn North oil sands in Alberta come online and Shell increases output at its Abathasca Oil Sands Project. We expect oil production to increase from an estimated 3.71mn barrels per day (b/d) in 2012 to 4.40mn b/d in 2016. By 2021, total oil production could hit 4.97mn b/d.
- Cheap oil prices from the abundance of local supply will benefit refiners in western Canada, which have easier access to oil sands output concentrated in Alberta. Proposed pipeline programmes by TransCanada and Enbridge, which would allow for the delivery of cheaper western crude to refineries in eastern Canada, could reduce feedstock costs for these refineries traditionally dependent on expensive crude imports. This is provided that eastern refineries have the facilities to process the heavier western crude oil.
- Gas production will initially decrease as existing conventional gas resources deplete, falling from an estimated 155.1bcm in 2012 to 152.3bcm in 2014. Thereafter, this trend will reverse as the commercial production of shale gas gradually comes onto the market; gas supply will increase to 155.3bcm in 2016, and reach 164.1bcm by 2021.
- While gas consumption growth will be relatively flat at the consumer level, rising energy use at the oil sands facilities continues to push total gas forward, as much of the oil sands production needs will be powered by gas. Gas consumption is set to grow from 86.4bcm in 2012 to 97.0bcm in 2016. This upward trend will continue, with gas consumption expected to hit 109.9bcm by 2021.
- While existing oil and gas reserves continue to deplete as fields mature, successes in unconventional and offshore exploration could prove-up reserves, posing an upside risk to our forecasts.
- Asian companies such as Korea Gas Corporation (Kogas), Mitsubishi Corporation and PetroChina have been particularly interested in acquiring unconventional gas assets in Canada. We expect Canada to continue receiving interest from Asian-based companies in gas assets and gas infrastructure.
- The abundance of gas production provides Canada with much export potential but we highlight that liquefied natural gas (LNG) export infrastructure must be in place to facilitate exports to the LNG-hungry Asia region, as shale gas production in the US – its traditional gas export market – drives down export demand. Shell’s proposal for a 20.4bcm per year gas liquefaction and export facility in Kitimat, British Columbia, is a step in the right direction in building up Canada’s export capabilities. However, its regulatory regime could slow down infrastructure development.
At the time of writing, we assume an OPEC basket oil price for 2012 of US$111.47/bbl, falling to US$107/bbl in 2013 and US$99/bbl in 2016. Global GDP in 2012 is forecast at 2.7%, up from 3.1% in 2011, reflecting a faltering recovery in the US and an uncertainty with regard to the eurozone debt crisis. For 2013, growth is estimated at 3.3%.
BMI Industry View 7
SWOT Analysis 9
Canada Oil and Gas SWOT 9
Global Energy Market Outlook 10
Table: Oil Production Forecasts, 2010-2016 (‘000 b/d) 10
Table: Oil Consumption Forecast, 2010-2016 (‘000 b/d) 16
Regional Energy Market Outlook 17
Canada Energy Market Overview 22
Table: Upstream Projects 23
Industry Forecast Scenario 26
Table: Canada Oil & Gas – Historical Data & Forecasts, 2009-2016 26
Table: Canada Oil & Gas – Long-Term Forecasts, 2014-2021 27
Oil and Gas Reserves 28
Oil Supply And Demand 30
Gas Supply And Demand 31
LNG 32
Refining And Oil Products Trade 33
Revenues/Import Costs 34
Key Risks To our Forecast Scenario 34
Oil And Gas Infrastructure 35
Oil Refineries 35
Table: Refineries In Canada 35
Service Stations 38
Oil Pipelines 38
LNG Terminals 40
Gas Pipelines 41
Regional and Country Risk/Reward Ratings 44
Table: Developed States Oil & Gas Risk/Reward Ratings, Scores out of 100 44
Table: Developed States Upstream Risk/Reward Ratings 48
Table: Developed States Downstream Risk-/Reward Ratings 48
Canada Upstream Rating – Overview 49
Canada Upstream Rating – Rewards 49
Canada Upstream Rating – Risks 49
Canada Downstream Rating – Overview 49
Competitive Landscape 50
Executive Summary 50
Table: Key Players – Canadian Oil And Gas Sector 52
Overview/State Role 52
Licensing and Regulation 53
Table: Key Upstream Players 56
Table: Key Downstream Players 57
Company Monitor 58
Suncor 58
Shell Canada 61
Encana 64
Cenovus Energy – Summary 67
Canadian Natural Resources – Summary 67
ConocoPhillips – Summary 69
Chevron – Summary 69
Devon Energy – Summary 70
Syncrude – Summary 70
BP Canada – Summary 70
Husky Energy – Summary 71
ExxonMobil – Summary 72
Statoil – Summary 73
Total – Summary 74
Murphy Oil – Summary 74
Enbridge – Summary 74
Nexen – Summary 75
Occidental Petroleum – Summary 76
TransCanada – Summary 76
UTS Energy – Summary 77
Gazprom – Summary 77
Ultramar – Summary 78
TAQA – Summary 78
Apache – Summary 79
Penn West – Summary 79
Talisman Energy – Summary 80
PetroChina – Summary 80
Korea National Oil Corporation (KNOC) – Summary 81
North America – Regional Appendix 85
Table: Oil Consumption Historical Data & Forecasts, 2009-2016 (’000b/d) 85
Table: Oil Consumption Long-Term Forecasts, 2014-2021 (’000b/d) 85
Table: Oil Production Historical Data & Forecasts, 2009-2016 (’000b/d)) 85
Table: Oil Production Long-Term Forecasts, 2014-2021 (’000b/d) 86
Table: Refining Capacity Historical Data & Forecasts, 2009-2016 (’000b/d)) 86
Table: Refining Capacity Long-Term Forecasts, 2014-2021 (’000b/d) 86
Table: Gas Consumption Historical Data & Forecasts, 2009-2016 (bcm) 86
Table: Gas Consumption Long-Term Forecasts, 2014-2021 (bcm) 87
Table: Gas Production Historical Data & Forecasts, 2009-2016 (bcm) 87
Table: Gas Production Long-Term Forecasts, 2014-2021 (bcm) 87
Table: LNG Imports/Exports Historical Data & Forecasts, 2009-2016 (bcm) 87
Table: LNG Imports/Exports Long-Term Forecasts, 2014-2021 (bcm) 88
Methodology And Risks To Forecasts 89
Glossary Of Terms 90
Table: Glossary Of Terms 90
Oil And Gas Risk/Reward Ratings Methodology 92
Ratings Overview 92
Table: BMI’s Oil & Gas Business Environment Ratings – Structure 93
Indicators 93
Table: BMI’s Oil & Gas Upstream Ratings – Methodology 93
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology 94
BMI Methodology 96
How We Generate Our Industry Forecasts 96
Energy Industry 96
Cross checks 97
Sources 97
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