Canada must aCt quiCkly on its

resourCe bounty, says natural

resourCes minister Joe oliver

Calling the development and export of Canada’s resources “nation building,” federal Natural Resources Minister Joe Oliver says Canada must seize a once-in-a-lifetime energy opportunity or watch the associated economic benefits disappear.As the minister trumpets the need to develop Canadian resources, he hopes the U.S. government will make a decision on the Keystone XL pipeline as quickly as possible and downplayed a story in the New York Times that suggested — contrary to a U.S. State Department report — the pipeline could significantly increase oilsands production.Extracting Canada’s natural resources demands that governments do more to earn the social licence to develop the oil, gas, diamond, uranium and other lucrative deposits found across the country, Oliver said Monday at the annual meeting of Canada’s energy and mines ministers in Yellowknife, N.W.T.

Yet, groups observing the talks, such as Environmental Defence, say the feeling around the conference is “very disconnected with the reality” of Canadians’ concerns about the impacts of natural resource development on land, water and air.In a keynote speech to fellow ministers, Oliver compared the development and export of the

country’s natural resources to the building of the railroad across Canada or construction of the St. Lawrence Seaway.Canada must capitalize on its resource bounty while it still can, he said.Doing so requires the federal, provincial and territorial governments to develop Canada’s abundant natural resources, build the

needed infrastructure — such as pipelines and export terminals — and diversify the country’s markets beyond the United States to emerging economies, he said.Failing to act could see the country pass up billions of dollars in economic benefits and thousands of jobs, he said. The moribund Mackenzie Valley natural gas project, which

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faced a regulatory review of nearly a decade, was an “irretrievable loss” for a generation of aboriginals in the Northwest Territories, he said.“So we have a choice — to proceed or procrastinate. We can roll up our sleeves or wring our hands. We can decide to get this done or we can dither — and watch the opportunities pass to others,” Oliver told his counterparts.“Because make no mistake, this moment — this opportunity — is perishable. It will not last forever.”Oliver downplayed the New York Times report that highlighted Natural Resources Canada documents from early this year suggesting that approving the Keystone XL pipeline would increase oilsands production.A U.S. State Department report released in March found that approving or rejecting the project is

unlikely to have any substantial impact on the rate of oilsands development.“Whether it’s built or it isn’t built, there wouldn’t be a net impact on global emissions,” Oliver told reporters, believing Canadian crude would simply displace Venezuela oil in the U.S. if Keystone XL was built.With news reports out of the U.S. suggesting the Obama administration’s final decision on Keystone XL could get pushed back to 2014, Oliver said the federal government respects the American process and that Canada hopes “the decision will be made as expeditiously as possible.”Gillian McEachern with Environmental Defence said a larger discussion is required in Canada about what’s necessary in a national energy strategy that helps transition to a low-carbon energy system over the next couple of decades.

Part of the discussion needs to be about the pace and scale of development of the oilsands and shale gas, she said.Ministers must also acknowledge, she said, that a discussion about Canada’s energy strategy for the future is also its climate strategy.“The decisions that people in these rooms will make over the next five years are going to determine whether Canada is on a path to transition to low carbon and build the industries of the future and tackle climate change … or lock us into a really high carbon future, which is dangerous,” she said in an interview from Yellowknife.Oliver said that while governments in

Canada have an obligation to benefit from the natural resources, they also must honour their commitment to the environment — which he maintains is “our first thought in every major project we undertake.”However, the “once-in-a-lifetime opportunity” to secure prosperity and economic security can only be achieved if accomplished safely for Canadians and the environment, he added.He highlighted Enbridge’s proposed Line 9 pipeline reversal and TransCanada’s Energy East project to ship crude oil from Western Canada to refineries in Quebec and Atlantic Canada as

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examples of important initiatives that will help expand the country’s energy export markets, along with Keystone XL and liquefied natural gas projects in British Columbia.Oliver said he has no problem with Canadians who have legitimate concerns about environmental safety and are open to a discussion based on science. But the minister said he objects to people and groups who oppose “virtually every form of resource development.”“Canada was not built by naysayers,” he said.Kevin Lynch, vice-chair of BMO Financial Group and former clerk of the Privy Council, told ministers it’s imperative that Canada diversify its trade and investment.The strongest economic growth in the world is coming from emerging

markets that Canada must target for exporting its resources, he said. However, Canada continues to send most of its exports to traditional trading partners that are in the slow-growth part of the world.“We’ve got a mismatch,” Lynch said. “We’re in the slow lane.”He noted Canada sends virtually all of its oil and natural gas to the United States, at a time when the U.S. is becoming increasingly energy self-sufficient due to development of shale oil and gas.At the same time, 97 per cent of new global energy demand is coming from emerging markets that Canada has largely failed to tap to date, he said.“We have a single buyer and that single buyer is an increasingly unreliable buyer of our energy exports, and that’s a difficult place

for us to be in,” Lynch added.

Consistent exeCution delivers

substantial Growth for husky enerGy

Husky Energy (TSX:HSE) is on track to achieve substantial production growth in 2014, supported by consistent performance from all segments of the business and commencement of production from the landmark Liwan Gas Project. Liwan is the cornerstone of Husky’s

Asia Pacific growth pillar and the first of several major projects across the Company to come on stream. Husky’s latest heavy oil thermal development, the 3,500 barrels per day (bbls/day) Sandall project, is expected to begin producing in the first quarter of the year and the Sunrise Energy Project, a 60,000 bbls/day (30,000 net to Husky) oil sands development, remains on track to achieve first oil in late 2014.“Three years ago we laid out a balanced growth strategy,” said CEO Asim Ghosh. “The strategy was built

on transforming and rejuvenating our foundation in Heavy Oil and Western Canada, supported by our Downstream assets. This platform provided a solid foundation on which to create our three growth pillars in the Asia Pacific Region, the Oil Sands, and the Atlantic Region.“We have consistently delivered results against that strategy. The transformation of our Heavy Oil business is well underway, the stage is being set for a similar transformation in Western Canada, and all three of our growth pillars are achieving significant milestones. As we enter the higher growth phase of our business plan, we will stay the course and remain focused on execution.”NEW ANNOUNCEMENTS FOR 2014C o r p o r a t e

• Production in 2014 isexpected to be in the range of 330,000 to 355,000 barrels of oil equivalent per day (boe/day), compared to an estimated average annual production of 312,000 boe/day in 2013. • TheCompany is on trackto meet its five-year compound annual production growth target of 5-8 percent through 2017. • The capital expenditureprogram for 2014 is $4.8 billion, compared with a forecast of $5.0 billion for 2013. Approximately $4 billion of the budget is expected to be spent in Upstream. F o u n d a t i o n• The3,500bbls/daySandallheavy oil thermal project is expected to begin production in the first quarter of 2014. The 10,000 bbls/day Rush Lake thermal development is also

under construction and is advancing towards first production in mid-2015. • Husky will investapproximately $300 million at the Ansell liquids-rich natural gas development as it looks to more than double production from the multi-zone play over the next several years. • The Company plansto drill a total of about 865 wells in 2014 with a focus on oil and liquids-rich natural gas plays. Growth Pillars• IntheAsiaPacificRegion,

the Liwan Gas Project is in the final stages of commissioning. It is anticipated first gas will come on stream in early 2014. The completion of the first stage of the project, the largest investment in the Company’s history, marks a significant milestone in the development of the Asia Pacific growth pillar. • Husky has made a newnatural gas discovery in the Madura Strait offshore Indonesia. The well is in the vicinity of a planned shallow water development and can be tied directly into the infrastructure.

This follows on the four shallow water gas discoveries made in the Strait in the 2012 drilling program. • In Oil Sands, the SunriseEnergy Project remains on target for first oil production in late 2014. Field facilities are now complete and commissioning of all eight well pads is expected to be finished by year end. The overall project is approximately 85 percent complete. • The Company has filedan amendment application for Phase 2 of Sunrise (Husky working interest is 50 percent) to incorporate

efficiencies learned from Phase 1. The next phase, which is subject to Company and partner approvals, will bring total production capacity to 200,000 bbls/day. It is anticipated Phase 2 will be developed in two 70,000 bbls/day capacity stages. • In the Atlantic Region,gas injection is expected to begin in the coming weeks at the South White Rose extension and first oil production is on track for late 2014. • Husky and its partner arepursuing the opportunity to conduct additional drilling in 2014 in the

Flemish Pass Basin to further assess the economic potential of an oil development. In 2013, the Company announced two new discoveries at Bay du Nord and Harpoon, in addition to a previous discovery made in 2009 at Mizzen. Best estimate contingent resources at Bay du Nord are estimated by Husky at 400 million barrels (on a 100 percent W.I.) as of September 23, 2013. Best estimate contingent resources at Mizzen are estimated by Husky at 130 million barrels (100 percent W.I.) as of December 31, 2012. Husky has a 35 percent working

interest in all three discoveries. FORECASTED 2013 PERFORMANCE AGAINST TARGETS ALL ON TRACKIn 2010, Husky laid out a set of key performance targets designed to increase shareholder value. Three years into the plan, the Company remains on track to deliver against its targets and in several cases, raised the bar.P r o d u c t i o n2013 production is forecast to be within guidance at approximately

312,000 boe/day. This reflects the unplanned Terra Nova Floating Production, Storage and Offloading (FPSO) vessel offstation program, a deliberate reduction in dry gas production, and production constraints in Western Canada due to third-party outages and downtime.With the expected increase in production in 2014 and the pipeline of projects under development, the Company is on pace to achieve its compound annual production growth target of 5-8 percent from 2012-2017.Cash Flow from Operations

Husky remains on target with its goal to increase cash flow by 6-8 percent on a compound annual growth rate basis through 2017.With the Liwan Gas Project coming on stream in early 2014, the Company expects to see a significant increase in cash flow from operations. The Company will also recover its partner’s 51 percent share of exploration expenses from initial production.Reserves ReplacementHusky remains on pace to achieve an average reserves replacement

ratio greater than 140 percent through the 2017 plan period and will announce its reserves replacement results in early 2014.Return on Capital in Use and Return on Capital EmployedThe Company has set a target of 14-15 percent for Return on Capital in Use and a target of 11-12 percent for Return on Capital Employed, and is on track to achieve both of these by 2017.2014 PRODUCTION GUIDANCEHusky’s compound annual

production growth rate target is 5-8 percent through 2017.Production in 2014 is expected to be in the range of 330,000 to 355,000 boe/day. This takes into account new production from the Liwan Gas Project and new production from the Sandall heavy oil thermal development. The 2014 forecast includes an ongoing planned decrease in Canadian dry gas production and an increase in light, medium and heavy oil production, reflecting the shift in capital to higher netback opportunities

marGuerite mosher remembers the foundinG of the

desk and derriCk Club

A founding member of Calgary’s Desk and Derrick Club recalls elevating the role of women in the oil patchWay back when the Second World War was on – and I’m sorry to say this – men didn’t think that women knew anything. Well, I’m a little bit stubborn. And I was tall and I wore high heels. So I looked some of

the men right in the eye and said: “Well, women do know something.”The Desk and Derrick Club really grew because women at that point wanted to be instructed in different parts of the industry. Desk and Derrick was organized in the U.S. – in New Orleans – then I got into it with a couple girls up here. We formed a chapter in Calgary to teach women what the petroleum industry was all about. We started field trips to various parts of the oil industry so that the girls learned.I said, “If I’m here in the office and

men come in from the field, well, I don’t know what they’re talking about.” So I asked, “Can I go out to the field and spend a little time, so that I know exactly what they’re talking about?” We had field trips for girls to go out to the various operations in the field and learn about the industry.These field trips certainly helped women in their careers and in getting established in the industry. The girls got out so they knew what all the talk was about. That certainly helped a lot when we got back into the office.Everything has changed since then.

At the time, we would have a field trip and there might be four busloads full to see what was in the field. We also gathered speakers from the industry and we heard from special speakers who might be going through Calgary. We had top people discussing the industry. These were CEOs of the big companies and because of that, a lot of firms encouraged women to belong to Desk and Derrick.There was a time that our Calgary club was the biggest in North America.I was the first Canadian to be elected

president of all North America. That was quite an accomplishment at that time because Americans didn’t think that Canadians were very knowledgeable. These days, however, there are not as many women participating in Desk and Derrick.

all of Canada benefits from

western oil

Canada’s Natural Resources Minister Joe Oliver warned last week the window of opportunity to develop its energy is in danger of

closing if action is not taken soon. It’s a warning that should not go unheeded, but without every province and territory on board, Oliver’s words may sadly come to fruition.Currently, Canada isn’t getting the biggest bang for its oil because of its inability to get enough of it to the overseas market via coastal ports. Three proposed projects are attempting to fix this problem by expanding or creating new pipelines.Enbridge’s Northern Gateway proposal, a $6.6-billion project, aims to move bitumen from Alberta

to Kitimat; Kinder Morgan hopes to double its capacity to move oil to the coast through its Transmountain Pipeline, a $5.4-billion project; and the newly-proposed $12-billion Energy East pipeline by TransCanada Corp. plans to carry crude oil to the East Coast.These are major projects that would create tremendous wealth for Canada and, if all environmental assessments come out favourably, should get approval.One worries, however, that complaints by B.C. Premier Christy

Clark and Ontario Energy Minister Bob Chiarelli that those provinces aren’t getting a fair share of oil royalties will cause unnecessary holdups.Clark has even made the issue one of her five conditions for endorsing heavy-oil projects.Not to be outdone, Chiarelli said he wants Ontario to get its cut from the proposed Energy East pipeline.What both politicians fail to understand is that while Alberta benefits a great deal from oilsands development, the rest of Canada

also gains from energy exports through equalization payments. It’s a fact that Saskatchewan Premier Brad Wall couldn’t help but raise when Chiarelli’s comments came to light.“We’ve never asked for our cut of the Ontario taxes that are derived from those (Ontario-made) cars that go through (Saskatchewan), and neither would we.”Approval of these projects should depend solely on the environment and their impact on communities, not on politicians hoping to win points from voters.

Canada vows to defend santa

Claus from russian troops as row over territory

esCalates

Russian President Vladimir Putin has responded to Canada’s plans to extend its Arctic territorial claim by calling on his military to devote ‘special attention’ to the region.Earlier this week, Canadian Foreign Affairs Minister John Baird confirmed a submission to the United Nations claiming 1.2 million square kilometres of seabed under the Atlantic, along with a preliminary claim relating to the Arctic Ocean.In response Mr Putin told a defence ministry meeting that he wished to see the military bolster its presence in the territory. “I would like you to devote special attention to deploying infrastructure and military units in the Arctic,” the Kremlin chief said in remarks made

at the meeting and reported by AP.He emphasised the importance of the Soviet-era base at the New Siberian Islands, which the military started to overhaul this year. Russian officials have described the facility as key for protecting shipping routes that link Europe with the Pacific region across the Arctic Ocean.The area is of both environmental and financial importance. The US Geological Survey believes it could hold up to 13 per cent of the world’s undiscovered oil.It is thought the territory could also have as much as 30% of the world’s hidden natural gas reserves.In 2007, Russia staked a symbolic claim to the Arctic seabed by dropping a canister containing the Russian flag on the ocean floor from a small submarine at the North Pole.Defense Minister Sergei Shoigu said Tuesday that the military next year will form a dedicated group of forces in the Arctic to protect Russia’s national interests in the region.Shoigu added that the Russian armed forces would also work to expand their presence elsewhere.According to AFP the increasingly acrimonious row prompted a bizarre exchange in the Canadian parliament in which Paul Calandra, parliamentary secretary to the prime minister cited the claim on the North Pole in order to attack an opposition party.“We are defending the north further by making a claim on the North Pole,” he said.

“We know that the (opposition) Liberals do not think that the North Pole or Santa Claus are in Canada. We do. We are going to make sure that we protect them as best we can.”Liberal Leader Justin Trudeau reportedly agreed citing the fact that Santa’s address has a Canadian post code.Russia, the United States, Canada, Denmark and Norway have all been trying to assert jurisdiction over parts of the Arctic.

Canada a reliable sourCe of oil and natural Gas for

years to Come

Federal Natural Resources Minister Joe Oliver is in Asia this week with one goal: Selling Canada.On Monday, Oliver told a South Korean business audience Canada is “a stable, responsible and welcoming market for investment – especially in the energy sector” and pitched Canada as a place the energy-hungry country could get reliable sources of oil and liquified natural gas for years to come.The sales talk comes after former Canadian cabinet minister Jim Prentice recently warned that Canada risked falling behind in the global energy marketplace and that investment in the oil patch, especially from China, was drying up.Prentice, now CIBC vice-chairman, said foreign governments and businesses are confused by recent changes to Canada’s foreign investment rules.

Speaking with reporters Monday, Oliver said he expects he’ll be asked to clear up confusion on the new investment regulations, under which deals with state-owned enterprises face increased scrutiny.In late 2012, the Conservative government changed foreign investment guidelines after China’s state-owned CNOOC sought to buy Canadian oilsands operator Nexen.The $1.5-billion deal was eventually approved.On Wednesday, Oliver will address the World Energy Conference in South Korea before heading to China, where he’ll meet with government officials and energy industry executives.And he won’t be the only Canadian representative in Asia pressing palms and peddling this country as an investment destination and resource marketplace — Foreign Affairs Minister John Baird is currently in China and Governor General David Johnston heads there Thursday.International Trade Minister Ed Fast also recently wrapped up a visit to the region, including his fourth trip to China.

enCana to Cut spendinG, Grow oil, natural Gas liquids produCtion in 2014

Encana Corp.’s capital spending is expected to come in 10 per cent lower next year, while production of valuable oil and natural gas liquids is targeted to rise by 30 per cent, the company announced Wednesday.

The Calgary-based energy giant said three quarters of its planned $2.4 billion to $2.5 billion capital budget next year will be concentrated on five liquids-rich areas: the Montney and Duvernay in Western Canada; the DJ Basin in Colorado; the Tuscaloosa Marine Shale in the southeastern United States and the San Juan Basin in New Mexico.Encana (TSX:ECA) has said its goal is to derive three-quarters of its cash flow from oil and natural gas liquids in 2017 by focusing on areas that can offer higher returns.Encana does not expect its total forecasted production levels to change from last year, despite the spending cut. A 30 per cent boost in oil and natural gas liquids will be offset by a decline in less profitable dry natural gas, it said.“We’ve heard many comments from investors that 2014 is a transition year and that the excitement doesn’t show up beyond this year. I would actually disagree with that comment,” said CEO Doug Suttles, who took the reins in June.

For example, Suttles said Encana’s five core assets are expected to churn out 45 per cent of its 2014 operating cash flow, even though they only comprise 25 per cent of projected production.“Over time, we’re very confident that this focus on core value instead of production will deliver sustainable value to our shareholders,” said Suttles.Encana isn’t anticipating a big change in commodity prices next year, forecasting natural gas prices to hit US$3.75 per 1,000 cubic feet and US$95 for West Texas Intermediate oil.In unveiling a leaner, more focused strategy last month, Suttles announced that Encana would be cutting 20 per cent of its workforce of 4,900 full-time employees and contractors.Suttles said Wednesday that those cuts are now complete. Encana expects to take a $65 million after-tax charge during the fourth quarter related to the restructuring.

Encana shares were off about 3.4 per cent at $19.68 in late-morning trading on the Toronto Stock Exchange.

Group reapplies to oppose alberta oilsands proJeCt after Court fiGht

An environmental group is asking again to speak to an oilsands review panel after a court upheld its right to do so.The Alberta Oilsands Environmental Coalition is asking the province for the right to appear at a regulatory hearing into a project proposed by Southern Pacific Resource Corp. to expand an oilsands facility northwest of Fort McMurray.When the coalition first asked for that permission, it was denied.The group appealed that refusal to the courts and won -- partly on the strength of a government memo suggesting that permission was withheld because of the group’s critical attitude toward the industry.

Alberta Environment must now decide whether the group’s recreational licence to some land that would be affected by the project is enough of a direct interest to allow them into the hearing.In his ruling, Queen’s Bench Justice Richard Marceau urged the government to allow a broad range of participants in the hearing.

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