Canada To Compete In Oil Market

The vast potential of Canada’s oil industry has long been evident. However, most of the oil is trapped in the “tar sands” of northern Alberta. Extraction was for decades considered uneconomical due to the high costs associated with stripping oil from dense sand and shale. As long as more accessible sources of oil existed (e.g., in Indonesia, Saudi Arabia and Venezuela), international firms were unwilling to undertake the investments necessary. Consequently, oil trapped in the tar sands was not counted in official reserve estimates.

However, increased international oil prices, combined with advances in extractive technologies, now make it economically viable to accelerate removal of the oil. The Alberta Energy and Utilities Board estimates that some 1.6 trillion barrels of crude oil lie in the tar sands. Of this, approximately 11% (some 175 billion barrels) are recoverable under current high oil prices. These reserves were officially recognised in 2003, dramatically raising Canada’s proven reserves from approximately 5 billion to some 180 billion barrels (positioning it second only to Saudi Arabia at 265 billion barrels).

www.forbes.com