Canada’s Oil & Natural Gas

Market Access

The Key to Future Growth

Calgary Real Estate Forum October 29, 2013

Energy   Markets  

Environment   Benefits  

Enabling Responsible Development

2

Source:  Cenovus  

Canadian Oil Sands

Global Crude Oil Reserves by Country

26 25 2130

3748

8092

102

141155

173

265298

0

50

100

150

200

250

300

Ven

ezue

la

Saud

i Ara

bia

Can

ada

Iran

Iraq

Kuw

ait

Abu

Dha

bi

Rus

sia

Liby

a

Nig

eria

Kaz

hakh

stan

Chi

na

Qat

ar

Uni

ted

Stat

es

billi

on b

arre

ls

Source: Oil & Gas Journal Dec. 2012

Restricted (81%)

Open to Private Sector

Oil Sands 56%

Other 44%

World Oil Reserves Open  to    

Private  Sector  

4

Canadian Oil Sands (Bitumen and SCO) & Conventional Production

5

Access to Markets – Pipeline Expansions in Development

2012 Canada and U.S. Demand for Crude Oil by Source Thousand Barrels per Day

7

0

2

4

6

8

10

12

14

China India EuropeanUnion

UnitedStates

Japan Korea

mmb/d

Net  oil  imports  in  the  New  Policies  Scenario

2005201120202035

Changing Global Oil Import Needs

Source:  IEA  World  Energy  Outlook  2012,  EIA  

8

WCSB Takeaway vs Supply Forecast

9

Crude Oil Rail Exports Western Canada vs. North Dakota

10

•  Opportunities: •  Relatively quick •  Flexibility •  Less diluent •  Use in both

directions

•  Challenges: •  Recent safety •  Higher costs •  Limited loading and

tank car availability

Source:  Peters  &  Co.  Limited  =  Sept  2013  

Environmental Performance

●  Production §  COSIA §  GHG emissions §  Water – oil sands/tight oil §  Land/tailings

●  Pipelines §  Integrity & operations

●  Marine §  Prevention, response and

recovery – tankers/ports

●  Regulation and Monitoring §  Enhanced oil sands

monitoring – more sites, more transparency

§  Up to $50M/yr paid by industry

11

0 100 200 300 400 500 600

North  Sea  -­‐  Forties

Brazil  -­‐  Tupi

Saudi  Arabia  -­‐  Arab  Light

US  Barrel  Refined  in  the  U.S.  (2005)

Iraq  -­‐  Kirkuk  Blend

Cdn  Oil  Sands:  Mining  Dilbit  (PFT)

Mexico  -­‐  Maya

Venezuela  Bachaquero

US  -­‐  Mars

Cdn  Oil  Sands:  Low  SOR  SAGD  Dilbit

Iraq-­‐Basra  Light

Canadian  Oil  Sands:  SAGD  Dilbit

Nigeria  -­‐  Bonny  Light

Cdn  Oil  Sands:  Mining  SCO

US  -­‐Kern  River

Venezuela  -­‐  Petrozuata

kgCO2e  per  barrel  of  refined  product

Well-­‐to-­‐tank

Refined  productCombustion

The Oil Sands GHG Emissions Challenge Improving to at least the emissions of Similar Crudes

Source: IHSCERA Oil Sands Dialogue Getting the Numbers Right 2012

+5%  

U.S.  Barrel  Refined  in    the  U.S.  (2005)  

+2%  

12

13

Canadian Natural Gas

North American Unconventional Gas Resources

14

Current Disposition of W. Canada’s Natural Gas Production (2012)

TransCanada Transmission Mainline

TQ&M

Westcoast

Kern River

Northwest Northern Border

TransCanada Alberta (NGTL)

NGPL

ANR

ANR El Paso

PG&E

SoCal

PGT

Texas Eastern

Panhandle

Algonquin

Transcontinental

ANG/ Foothills

NGPL

Northwest Foothills

El Paso

Transwestern

Trailblazer

M&NE

CNG

Iroquois PNGTS

Alliance

Lakes Great

West 2.5 bcf/d

Mid West 4.8 bcf/d

East 1.1 bcf/d

Domestic 5.3 bcf/d

15

●  LNG for export ●  Oil Sands growth ●  Gas-fired power and cogeneration ●  Vehicles – CNG/LNG

Natural Gas – Market Opportunities

16

Industrial21.5%

Residential13.3%

Commercial12.1%Electricity  

Generation13.4%

Vehicles0.2%

LNG19.2%

Oil  Sands20.3%

NATURAL  GAS  DEMAND    BY  SECTOR  -­‐  2035  

Source:  The  Conference  Board  of  Canada    December  2012  

0

5

10

15

20

25

30

35

40

45

50

2010 2015 2020 2025 2030 2035 2040

ChinaTaiwanIndiaSouth  KoreaJapan

Imports to Asian Economies with Growing Natural Gas Requirements (Bcf/d)

17

Source: EIA 2013 International Energy Outlook, Press reports, CAPP

Asian Markets Represent an Attractive Export Option

$/M

Mbt

u

2012  Japanese  LNG  Price  

●  Kitimat LNG (Chevron, Apache) §  1.4 Bcf/d §  Permits received; awaiting investment decision

●  BC LNG Export Co-operative §  0.125 Bcf/d §  Permits received

●  LNG Canada (Shell, KOGAS, Mitsubishi, PetroChina) §  2.0 – 3.2 Bcf/d §  Feasibility stage; applied for some permits

●  Pacific Northwest LNG (Progress/Petronas, Japex) §  2.0 Bcf/d (Merger approval granted) §  Completed feasibility, progressing to pre-FEED

●  Nexen/Inpex §  Conducting feasibility

●  Prince Rupert LNG (BG Group) §  3.0 Bcf/d §  Advancing feasibility, applying for permits

●  AltaGas/Idemitsu Kosan §  0.27 Bcf/d §  Conducting feasibility

●  ExxonMobil/Imperial Oil (WCC LNG Ltd) §  4.0 Bcf/d §  Applied for export licence

●  Woodfibre LNG §  0.3 Bcfd §  Applied for export licence

Canadian LNG export projects in development

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Total  potenPal  new  demand  ~  13.0  Bcf/d  Expressions  of  interest    to  proceed  with  a    project  have  also  been  made  by;  Woodside  Petroleum  &  South  Korea  E&S  

Canadian Production – Market Constrained Case and New Market Opportunity Case

Eastern Canada CBM Western Canada Unconventional Western Canada Conventional

Market Constrained Case

New Market Opportunity Case

20

●  Market Access for Oil §  Decision or delay on Keystone XL

•  Final Environmental Impact Statement – State Dept.

§  Decision on Enbridge Northern Gateway pipeline •  NEB/JRP decision by end of 2013

§  Decision on reversal of Enbridge Line 9 to Eastern Canada •  Reversal of existing pipeline - currently in hearing

§  Discussions to address BC’s 5 Conditions for oil pipelines §  Applications for Trans Mountain and Energy East pipelines §  Rail – safety, loading terminals, tank cars

●  Market Access for Natural Gas §  Announcement of decisions to proceed with LNG projects in BC §  US policy decision/approvals for US LNG facilities §  US GHG policy for existing coal plants

Key Indicators

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