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Canadian Oilsands Gain Importance

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Canadian Oilsands Gain Importance as Other Producers Cut Exports By The Canadian Press 10 Sep 2007 TORONTO (CP) -- Alberta's oilsands could put Canada ''in the front ranks'' of energy producers in a few years as other oil-producing countries reduce their exports, says CIBC World Markets. The world's leading oil countries are likely to see their exports drop by some 2.5 million barrels a day by the end of the decade, the CIBC's investment arm said Monday. ''OPEC and other key oil producers like Russia and Mexico are struggling not only to grow production, but to manage their own soaring rates of domestic oil consumption,'' the firm said in a release. ''This struggle will likely see their collective crude exports, which account for roughly 60% of current world oil production, to fall by as much as 7% by 2010,'' causing higher much higher oil prices. ''One of the few areas where production can be expanded significantly is the Canadian oilsands, a vast reservoir of bitumen whose extraction and refining economics are becoming increasingly attractive as world oil prices continue to set new highs,'' said Jeff Rubin, chief economist and chief strategist at CIBC World Markets. ''Already at over a million barrels per day, production is slated to triple over the next decade and by 2020 could well be producing over four million barrels per day of synthetic crude, catapulting Canada to the front ranks of oil producers.'' Rubin said oilsands expansion over the next decade will surpass deep-water wells as the single largest source of new global supply. And almost all of the increase in Canadian oil production will be slated for export to the United States. Canada's domestic oil needs shrank last year and are seen as unlikely to grow significantly. But other oil-producing countries are becoming major oil consumers. Last year, OPEC members, along with independent producers Russia and Mexico, consumed over 12 million barrels of oil per day - about 60% more than China and slightly more than all of western Europe. ''Depending on one's view of the investment climate in Kazakhstan and Nigeria, Canada represents anywhere from 50% to 70% of the investable oil reserves in the world,'' Rubin said. ''Increased global reliance on high-cost sources of unconventional supply will be accelerated by the decline in the export capacity of traditional oil-producing countries and will soon put Canada's oilsands in the global energy spotlight.'' Rubin is scheduled to speak Sept. 17 in Cork, Ireland, at the sixth annual conference of the Association for the Study of Peak Oil & Gas conference. © The Canadian Press 2007