[AirlinePilot]

The concrete part about the reserves that were debooked was the important part of this article.

[AirlinePilot]

we all know what a boon to the world the tar sands are going to be

[copious.abundance]

So, you believe the corporate press releases if they say they're putting a production project on hold, but if they say they're gonna drill more wells or start construction on a new project, it's all lies.

. . . OK.

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And speaking of the oil sands . . .

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Falling costs revive oil sands
Alberta's oil sands producers are hopeful a rollback in labour and material costs will breathe new life into a sector struggling with the freefall in crude prices
NATHAN VANDERKLIPPE
May 4, 2009 at 4:16 AM EDT

CALGARY — After months of upheaval, Alberta's energy companies are rolling out new project cost estimates low enough that the hard-hit province could see a spending revival worth billions of dollars.

The dramatic retreat in oil sands development, forced by last year's oil price freefall, punished the Alberta economy and resulted in thousands of layoffs.

Now, labour and material costs have been lowered enough that the prospect of new life in the oil sands has become a topic of discussion in a province that just a few months ago watched as more than $200-billion in oil sands projects were either shelved or outright cancelled.

The downturn was so dramatic that reversing it will take time. But the very fact that a revival is being discussed marks a significant change in oil patch optimism.

"Rather than needing $80- to $100-a-barrel [U.S.] to make projects work, all of a sudden you're looking at these and saying maybe they are economic in a $60 world, and fairly competitive globally," said UBS Securities analyst Andrew Potter. "I think we are kind of nearing the bottom in terms of negative sentiment towards oil sands. It's not going to happen right away, but later in the year you'll see more of these projects come back on the table and begin to be advanced."

[...]

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^
Here's an example of that:

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Petro-Can oil-sands costs keep going down
Apr 29, 2009 04:30 AM

CALGARY–Petro-Canada, which plans to merge with Suncor Energy Inc. this year, will likely see costs at its Fort Hills oil-sands development come down about 30 per cent in the economic downturn, the Calgary-based firm's CEO said yesterday.

The project's mining portion was costed at $14 billion, a number that now could sit at under $10 billion, given lower steel, labour and construction costs, Ron Brenneman told analysts on a conference call.

"It's pretty encouraging because it says ... on a stand-alone basis we can probably generate a double-digit return (with oil prices) at $60 (U.S.) with those kinds of numbers," he said, as well as improve on that with " synergies of the merger."

[...]

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And another . . . though this particular project appears to be too late to reduce their costs. But at least they're going ahead with it.

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Chevron: Athabasca Oil Sands Expansion to Start Up in 2011
by Isabel Ordonez
Dow Jones Newswires
Friday, May 08, 2009

A 100,000-barrel-a-day expansion at Royal Dutch Shell PLC's (RDSA) Athabasca Oil Sands Project is expected to be completed and start up in 2011, slightly behind schedule, a top executive of partner Chevron Corp. (CVX) said Thursday.

"It's going to start more likely next year, which is little behind the original schedule," Gary Luquette, Chevron's president North America Exploration and Production, told Dow Jones Newswires in an interview.

[...]

$this->bbcode_second_pass_quote('pstarr', 'W')hy wait for $60? I thought oil sands were a gusher at $30? This from FatherofTwo, PO in 2005"

$this->bbcode_second_pass_quote('', 'T')hat doesn't make any sense. They are already economically viable, and have been since oil surpassed $30/barrel. There already is a huge push occuring.

[AirlinePilot]

Developing oil sands to become even more costly: CERI

CERI, an independent research organization funded by Canadian industry and governments, said oil prices would have to climb as high as US$105 a barrel to pay for the cost of integrating technologies so greenhouse-gas emissions from the oil sands are comparable to those of conventional oil.

And this would not be an overnight solution. The technologies, ranging from widespread adoption of carbon capture and storage for plants using natural gas as a power source, to replacing natural gas with gasification or nuclear technologies, would take some two decades to implement fully. Newer technologies would take even longer.

With many oil-sands projects already delayed or cancelled as a result of the oil-price collapse and tighter credit, the new legislation "is going to squeeze out even more projects," said study co-author David McColl, research director at CERI. "[The oil sands are] not going to be the big boom that everyone thought it was."

http://www.financialpost.com/news-secto ... id=1589267

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>>> Rigzone <<<
$this->bbcode_second_pass_quote('', '[')b]Energy Cos Pounce on Price, Equities Rally by Raising Capital
by Isabel Ordonez | Dow Jones Newswires | Wednesday, May 13, 2009

Independent crude oil and natural gas producers are taking advantage of the commodity price and broader stock market rally by raising capital.

The flurry of deals, however, masks the varying degrees of financial health among companies in the sector. Better-capitalized companies, which tend to be larger, are using the opportunity to build up cash reserves to invest in growth. Many smaller firms, meanwhile, had overextended themselves when oil and gas prices were at all-time record highs and are issuing shares to pay down debt and appease creditors.

Five companies that specialize in the exploration and production parts of the energy supply chain have jumped on the capital-raising bandwagon, just as oil futures prices hit fresh six-month highs. They're not the only ones. Several banks, prodded by the results of the U.S. Treasury's stress tests, have announced plans to raise money through the issue of common stock. Ever since the broader markets began to show improvement in March, public companies have been increasing the pace at which they raise money in the U.S. through common stock sales. Last week, the number of such follow-on deals hit its highest point in two years, with 20 completed, according to data from Dealogic.

[...]

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Chevron to Proceed with Investment Plan in South Asia
by Supunnabul Suwannakij and Leigh Murray
Dow Jones Newswires
Friday, May 15, 2009

U.S.-based oil giant Chevron Corp. (CVX) plans to move ahead with investments in South Asia amid an expected strong economic recovery in the overall region.

"Asia will have the quickest recovery to feed future demand growth. We have strategic locations in Asia to support growth in the long term," Joe Geagea, managing director for Chevron Asia South Ltd., said at a press conference in Bangkok.

"We're not stopping anything in the region. Asia is the engine of growth."

Chevron's assets in South Asia cover Bangladesh, Cambodia, China, Myanmar, Thailand and Vietnam. Production from these assets accounts for 48% of net oil and gas production in Asia. In 2008, Chevron produced 682,000 barrels of net oil equivalent per day from its operations in the Asia Pacific.

[...]

[AirlinePilot]

Uncertainty Clouds Outlook for Oil Sector


Abdalla Salem El-Badri, the secretary general of OPEC, has indicated that the oil cartel, is “not satisfied” with current prices, which, he said have had a “big impact” on investments by its members. Thirty-five out of a total of 165 projects were being put on hold until 2013 within OPEC countries, he said.

“A price at $50 is insufficient for oil investment,” Mr. El Badri told a recent conference in Japan.



http://www.nytimes.com/2009/05/19/busin ... ted=2&_r=1

[copious.abundance]

This isn't *quite* an "end-of-credit-crunch impact on production" type of article, but it's a good follow-up of the previous oil sands articles I posted.

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Oil Sands Move from the 'Fringe to Center' of Energy Supply
IHS CERA
Monday, May 18, 2009

Technological advance in the Canadian oil sands has made Canada the world's second largest holder of recoverable oil reserves, after Saudi Arabia, and "an increasingly important part of the fabric of hemispheric and global energy security," according to a new major study, Growth in the Canadian Oil Sands: Finding a New Balance by IHS Cambridge Energy Research Associates (IHS CERA). "The oil sands have moved from the fringe to the center of energy supply," the study adds.

The oil sands have become one of the most important sources of oil supply growth in the past decade as production more than doubled from 600,000 barrels per day in 2000 to 1.3 million barrels per day (mbd) by 2009. Development of the oil sands has made Canada the number one foreign supplier of oil to the United States and has become an integral part of the deep economic partnership between the two countries, which includes Canada as the largest export market for American goods and services. In one of the three scenarios developed for this study, oil sands production reaches 6.3 mbd by 2035 and Canada accounts for 37 percent of US oil imports -- up from 19 percent in 2008.

[...]

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$this->bbcode_second_pass_quote('pstarr', 'I')t was impossible at $20 or $150. But $60 has magic?

crap.

[copious.abundance]

Looks like the 2 threads were merged. Anyway . . .

>>> LINK <<<
$this->bbcode_second_pass_quote('', '[')b]Lower Costs Give Oil Drillers Breathing Room
by Ben Casselman | Dow Jones Newswires | Wednesday, May 20, 2009

A long-awaited drop in the cost of drilling and maintaining wells has finally materialized, easing the pressure on oil and natural-gas producers whose profits are being squeezed by lower prices.

Executives at the companies that own and develop fields complained for months that as tumbling energy prices ate into revenue, margins were being hurt by the stubbornly high cost of materials, labor and drilling services needed to get oil and gas out of the ground. In recent weeks, that has finally begun to change.

Lower costs, along with a modest rebound in oil prices to more than $55 a barrel, helped several companies deliver better-than-expected earnings in the first quarter.

"We've certainly seen a cost response almost everywhere now," said John Richels, president of oil and gas producer Devon Energy Corp.

The Oklahoma City company said its costs have dropped 10% to 15% from the beginning of 2009 and predicted they will come down another 10% to 20% before the year is out. The decline helped mitigate Devon's $4 billion loss in the first quarter driven by the diminishing value of its oil reserves.

[...]

[AirlinePilot]

IEA warns of slide in energy investment:

http://www.nationalpost.com/todays-pape ... id=1614389

[AirlinePilot]

IEA sees 21% drop in E&P spend

http://www.upstreamonline.com/live/article179299.ece

"We estimate that global upstream oil and gas investment budgets for 2009 have already been cut by around 21% compared with 2008," the report said.
The IEA said that between last October and the end of April over 20 planned large-scale upstream oil and gas projects - valued at a total of more than $170 billion - were deferred indefinitely or cancelled. Those projects involved around 2 million barrels per day of oil output and 1 billion cubic feet per day of gas capacity. A further 35 projects were delayed by at least 18 months".

[copious.abundance]

We now have one of those put-on-hold oil sands projects being re-activated.

>>> Bloomberg <<<
$this->bbcode_second_pass_quote('', '[')b]Imperial Oil Approves C$8 Billion Kearl Oil Project
By Gene Laverty

May 25 (Bloomberg) -- Imperial Oil Ltd., Canada’s biggest oil company, will proceed with an C$8 billion ($7.1 billion) project to extract tar-like bitumen from sands in Northeastern Alberta.

Imperial’s board approved the first stage of the Kearl open-pit mining project that will produce 110,000 barrels a day when completed in 2012, the Calgary-based company said today in a statement. Kearl is expected to produce more than 300,000 barrels a day when it’s completed.

Imperial, which is controlled by Irving, Texas-based Exxon Mobil Corp., put Kearl on hold last year after oil prices tumbled. Chief Executive Officer Bruce March said last month the company was reviewing the project to find cost savings.

The company rose 19 cents to C$42.23 at the 4:10 p.m. close of trading on the Toronto Stock Exchange.