David Knapp
Energy Intelligence Group
IEA Conference on Non-Conventional Oil:
Prospects For Increased Production
Calgary, Alberta
November 25-26, 2002
l It’s not just Canadian tar sands
u Heavy oils and bitumens
u Other tar sands – Venezuela
u Oil Shales – Australia, Baltics, Morocco
l Resources - what’s there affects cost/financing
l Technology & experience a positive
l Location matters - op. costs & gov’t takes
l Oil prices, differentials a major revenue factor
l Environmental policy a major threats to costs
lHeavy conventional oil
u10-25° API
u New heavier fields, North Sea & elsewhere
lExtra-heavy conventional ( current PNG)
lLocal protests, odor problems overcome by
hotter furnace temps
lGreenpeace blackmail of refiner naphtha
purchases
lGovernment tax breaks important
l Huge resource, small recovery
u 2.6 bil. bbl at Stuart, 20 bil. for SPP 10 sites
u about 2/3 of Aussie total
l Provincial, Federal governments supportive
u special excise tax rebate, help on land, etc.
lGreenpeace “line in the sands”?
u threatened refiners buying naphtha w/ boycott
u strong public statements
lWill heavy oils be part of the solution (H2
source) or part of the problem?
lNeed hydrogen/heat to split out useful oils
lHuge amounts of carbon involved
lProblems with air and water pollution
lRecent big cost overruns in Canada
troublesome; not just labor costs?
l Biggest competitive threat is low oil prices
u From: high conventional availability
u weak Opec cohesion, ME Gulf openings
u strong non-Opec conv. supply growth
lCost side threatened more by governments
u technological progress lowering op. costs
u oil shale will lag heavy crudes, tar sands
u Kyoto threat to competitiveness in Canada
lTar sands, oil shale will go global
u threats will spread as well