CALGARY�Conventional oil reserves in Western Canada continued to decline in 1999, but remaining reserves of crude oil and oil equivalent increased by 2.1 billion bbl, says the Canadian Association of Petroleum Producers (CAPP).
The CAPP reserves report to year-end 1999 said reserves additions came primarily from oil sands areas; the industry also added an estimated 5 tcf of gas.
The report said conventional oil reserves in western Canada declined by 3.7% in 1999 to 3.5 billion bbl. The industry replaced 70% of 1999 production of 441 million bbl.
The report noted the reserve replacement occurred despite soft oil prices and low activity levels in the first half of 1999, when the price for benchmark light, sweet crude averaged $15.36 (US)/bbl.
Oil from oil sands mining projects resulted in gross additions of 2.3 billion bbl of reserves. These additions included booking of the Shell Albian project in the Fort McMurray region and revisions to 1998 estimates for the Syncrude Canada Ltd. and Suncor Inc. oil sands operations.
CAPP noted that about 60% of 5 billion bbl of proven oil sands reserves would require billions of dollars in investment before production.
Western Canadian sedimentary basin (WCSB) reserves decreased 1.7% from year-end 1998 to 58.1 tcf.
The industry replaced 83% of its 1999 production compared with 76% in 1998. About 60% of gas drilling in 1999 was in shallow gas areas where reserves are well-defined and already booked.
CAPP executive John Dielwart said industry has seen record gas drilling activity in 2000 because of growing demand North American demand for the commodity.
CAPP said the 1999 reserves report reflects the lower levels of activity in 1999 and not the higher levels seen so far in 2000. It noted the industry has replaced close to 95% of natural gas production and 90% of crude oil production for the 1993-1998 period in the WCSB.