CERI: Costs up for oil sands production

The costs of producing bitumen and synthetic crude in the Albertan oil sands have increased over the past year, says the Canadian Energy Research Institute in an annual report that projects steady growth in output.

Compared with last year’s report, estimated costs of production before blending and transportation are up 4.4% for steam-assisted gravity drainage, 1.6% for mining without upgrading, and 5.9% for integrated mining and upgrading (OGJ Online, May 29, 2013).

The new estimates of plant-gate supply costs: $50.89/bbl (Can.) for SAGD, $71.81/bbl for stand-alone mining, and $107.57/bbl for integrated mining. CERI estimates the cost of stand-alone upgrading at $40.82/bbl.

When the price of West Texas Intermediate crude is $100/bbl, the only economic production technology when blending and transportation are included in the estimate is SAGD, CERI points out.

After those adjustments, the WTI-equivalent supply costs at the Cushing, Okla., pricing hub are $84.99/bbl (US) for SAGD, $105.54/bbl for a stand-alone mine, and $109.50/bbl for an integrated mine and upgrader. CERI estimates the WTI-equivalent cost of a stand-alone upgrader at $41.44/bbl.

Production outlook

Average total production from the Albertan oil sands rose 10.9% last year to 2.1 million b/d. Of that, 1.9 million b/d came via in situ techniques and mining, and 300,000 b/d was from primary production and enhanced oil recovery in the oil sands area. Under CERI’s reference-case assumptions, oil-sands production via mining and in situ thermal and solvent extraction will increase to 3.4 million b/d by 2020 and 4.8 million b/d in 2048. Last year’s reference-case forecast was for 3.1 million b/d by 2020 and 5.6 million b/d by 2046.

The study’s scenario assumptions relate to global economic recovery and therefore demand for oil, emissions legislation, and the possible effects of technology on the rate of growth in oil demand.

In CERI’s high case, oil sands production excluding output by primary methods rises to 3.8 million b/d by 2020 and 5.7 million b/d 2048.

In the low case, production rises to 4.2 million b/d by 2030 and 4.3 million b/d by 2048.

CERI expects cold production from primary methods and EOR in the oil sands region to increase from 270,000 b/d in 2013 to a peak of 350,000 b/d by 2020 and slip to 200,000 b/d by 2048.

Capital and emissions

Total capital requirements during 2014-48 in the oil sands, excluding those for primary production and EOR, are $597.9 billion (Can.) in the reference case, $636.6 billion in the high case, and $590.2 billion in the low case.

CERI estimates an increase in natural-gas requirements for oil sands production from 1.474 bcfd in 2013 to 3.17 bcfd in 2046 in the reference case, 3.753 bcfd in the high case, and 3.87 bcfd in the low case.

Greenhouse-gas emissions in CERI’s projection rise from 55 million tonnes/year (tpy) of carbon dioxide-equivalent in 2013 to 144 million tpy in 2048 in the reference case, 165 million tpy in the high case, and 129 million tpy in the low case.

CERI forecasts cumulative emissions under the reference case during 2014-48 at 4.587 billion tonnes, 3.3% above the 35-year projection it made last year.

Related Articles

WAFWA: Aerial survey finds lesser prairie chicken population grew

07/06/2015 A recent range-wide aerial survey found the lesser prairie chicken population rose 25% from 2014 to 2015, the Western Association of Fish & Wil...

Production ramps up from Sunrise oil sands project

07/06/2015 Husky Energy Inc., Calgary, reported that 25 well pairs are now on production at its Sunrise oil sands project in northeastern Alberta. Steaming is...

Buru awarded onshore Canning licenses

07/06/2015 Buru Energy Ltd., Perth, and Mitsubish Corp. have been granted two production licenses for Ungani oil field in the onshore Canning basin of Western...

Cenovus sells royalty business for $3.3 billion

07/06/2015 Cenovus Energy Inc., Calgary, inked an agreement to sell its wholly owned subsidiary Heritage Royalty LP to Ontario Teachers’ Pension Plan for gros...

CERI: Energy, operational efficiencies possible in Canadian oil, gas

07/06/2015 Measures can be taken by operators in the expanding resource-intensive Canadian oil and gas sector to improve both energy efficiency and operationa...

AGL Energy to scale back upstream gas operations


Gas retailer AGL Energy Ltd., Sydney, says it will exit the oil business and massively scaling back its upstream gas operations.

Macondo settlement seen ‘positive’ for BP

07/06/2015 BP Exploration & Production Inc.’s recent agreement to settle federal and state claims related to the 2010 Macondo blowout and spill improves t...

Emerging producers offered guidelines for governance

07/06/2015 Like most worthy endeavors, governing oil and gas activity at the national level is easier said than done-especially where oil and gas never before...

Statoil installs subsea wet gas compressor at Gullfaks

07/06/2015 Statoil SA installed what it is calling the world’s first subsea wet gas compressor at its Gullfaks C platform offshore Norway. By compressing at t...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by
Available Webcasts

Better Data, Better Analytics, Better Decisions

When Tue, Oct 27, 2015

The Oil & Gas industry has large amounts of data stored in multiple systems which are purpose built for certain tasks. However, good decisions require insights based upon the data in all of these systems. These systems in turn do not talk to each other. So the process of analyzing data, gaining insights, and making decisions is a slow one and often a flawed one. Good decisions require accurate analytics and accurate analytics require superior/sustainable data quality and governance. This webinar focuses on:

  • The importance of data quality and governance
  • How technological advances are making data quality and governance sustainable in order to get the accurate analytics to make solid decisions.

Please join us for this webcast sponsored by Seven Lakes Technologies and Noah Consulting.


Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected