Canada’s sands of time show little sign of running out

In recent months, there has been a greatly heightened interest in the Canadian oil and gas market by service companies in Aberdeen City and Shire.

In March, UK Trade & Investment in partnership with Aberdeen City Council undertook a very successful trade mission to Western Canada, focusing on Calgary, Fort McMurray and Edmonton. Eleven companies participated in this mission, almost half of whom returned in June with UK Trade & Investment (UKT&I) support to take part in Calgary’s Global Petroleum Show, the world’s largest oil and gas event.

This was followed by two inward visits by Canadian market experts in October. Chad Molleken, director of the British Trade Office with UK Trade & Investment (in Calgary, spent three days on a fact-finding mission exploring oil and gas opportunities in Alberta with North East service companies both individually and at a business breakfast organised by Aberdeen and Grampian Chamber of Commerce. Click here for some tips from Chad on how to access the Canadian market.

A second presentation in Aberdeen on 31 October was made by Soheil Asgarpour of the Alberta Department of Energy. Dr Asgarpour, executive director for the Oil Sands Development, outlined the extensive programme of activity between now and 2020 to upgrade and increase production

In this special report for exportlink, Rita Stephen, development manager with Aberdeen City and Shire Economic Forum (ACSEF) outlines some of the attractions of the Canadian oil and gas market….

“Canada is currently in ninth place in the ranking of the world’s largest oil producers, producing approximately 2.5 million barrels per day. But, with oil reserves second only to Saudi Arabia, Canada is expected to increase its ranking in the next few years to be amongst the world’s top 5 oil producers.

Alberta oil sands Canada is also a safe, secure and stable energy market, and one which is decidedly pro-Scottish in general cultural terms. Business Gateway International is already actively helping to introduce North East service companies into Alberta in particular, in order to access the outstanding opportunities afforded by the province’s oil sands.

Indeed, the single main reason for Canada’s impressive energy growth is Alberta’s colossal oil sands deposits, which have been described by Time Magazine as “Canada’s greatest buried treasure that could satisfy the world’s demand for petroleum for the next century.” These oil sands comprise huge deposits of bitumen in three areas of north-eastern Alberta – a region which is larger than the state of Florida.

As a result of the oil sands’ potential, Alberta is currently undergoing phenomenal growth, and has seen $115 billion dollars invested since 1996, the highest economic growth of any province in Canada.

To date, only about 2% of the initial established resource has been produced, so, even bearing in mind the logistical differences between onshore oil sands production and offshore, there is clearly a wealth of long-term opportunity for North East oil service companies.

The oil sands

Dr Soheil Asgarpour, Executive Director for the Oil Sands Development with the Alberta Department of Energy, recently visited Aberdeen to outline the extensive programme of activity between now and 2020 to upgrade and increase production.

He noted that, of Canada’s total oil reserves of around 179 billion barrels, 175 billion barrels are located in the oil sands – that’s equivalent to 175 years of production at a rate of 2.7 million barrels per day. Dr Asgarpour predicted that, with advances in technology, it would be possible to increase production to 4 million barrels per day by 2020.

Some authorities are even more bullish. The Alberta Energy and Utilities Board (AEUB) estimate that Alberta’s oil sands deposits may contain up to 2.5 trillion barrels of bitumen, of which approximately 300 billion barrels are recoverable using existing technology.

This advance of technology is not without its challenges, one of the most crucial being, the shortage of labour. It is estimated that 100,000 additional jobs will be required over the next 10-15 years if production levels are to be increased.

Regular advertisements are already appearing in British newspapers recruiting for staff in Alberta, and the government of Alberta has already hosted a recruitment fair in Aberdeen.

Spectacular growth

Two Alberta cities in particular are already benefiting from this upsurge in exploration and production activity. Fort McMurray, 450km north of Edmonton, hosts the massive oil sands centre. Its population has virtually doubled in the last ten years and local activity displays all the classic symptoms of halcyon oil exploration – huge work camps planned to house incoming labour and truck drivers already commanding salaries of up to $125,000.

Edmonton itself has a population of one million and a workforce of 583,000 and an annual GDP of $41+ billion. In a recent survey by KPMG, Edmonton was ranked number one most cost-competitive city in the American Northwest. Networking sessions have already been arranged between the Scottish oil service companies and Edmonton-based businesses.

Alberta’s economic development team summarises the province’s energy facilities as follows: -

Alberta

112,000 oil and gas-producing wells
297,000kms of pipelines
516 sweet gas plants
246 sour gas plants, 59 sulphur recovery plants

Oil Sands

19 Commercial plants
43 primary recovery plants

Oil refineries

5 facilities ( 435,000 bbl per day capacity)
Petrochemicals – 5 major petrochemical sites

Additional oil and gas pipelines will need to be built to facilitate increased production and new technology will be required to support this growth and extend existing infrastructure. Current estimates are that there are projects worth over $85 billion already in the pipeline, expected to be completed by 2015.

Aberdeen City and Shire already has close, and deep-rooted, economic development links with Calgary in particular. This year ACSEF was honoured to be invited to make a keynote presentation on “Aberdeen - The Years of Change” at the Global Petroleum Show.

I am confident that North East companies are well placed to take advantage of Canadian energy growth, and, through the offices of BGI and UKT&I, can take part in our trade missions, seminars and exhibition presences to speak directly with Canadian oil decision makers and so place themselves at the head of the queue for subcontract work.”

If you are interested in participating in a mission to Canada with UKT&I, please contact Lynn Davie, Aberdeen City Council at: ldavie@aberdeencity.gov.uk or phone 01224 814605.