What Is The Remainder

[megalops]

Don,

 

For pricing try:

 

https://osi.alberta.ca/osi-content/Pages/Fa...umenPrices.aspx

 

It is graph compiled based on the ERCB reference prices, which are available here:

 

http://www.ercb.ca/docs/products/STs/st3/P...oil_current.pdf

 

These prices are in m3, you'll have to convert to barrels by dividing by 6.28.

 

These are month average prices delivered to Edmonton for light oil, and to hardisty for heavy oil. Edmonton light is essentially WTI less transport to Cushing OK. These are the equivalent pricing points in Alberta for light and heavy oil respectively. For daily prices, good luck. Those are only typically available to oil traders by subscription which cost a lot of money. The prices in the charts are what the companies typically get paid on (as a reference price) and what they pay royalties on.

 

For clarity, SCO is typically a 30% discount and bitumen is a 40% discount (SCO is crude oil - heavy in the graph in the first link above). That varies from month to month based on take away capacity and demand for heavier stocks of oil.

 

The breakeven price studies you see will typically include a notional return on capital in the price the author publishes. The return varies by author, but typically runs 9% to 15%, which is one reason you see such a disparity in break even prices. The typical number floating around now is in the $80 to $90 mark for new projects. Legacy projects were put in place on different economic assumptions. The ones done at a $50 breakeven price will be printing money at an oil price around $90. The mitigant to that is the ramp up in royalties that would occur once the project has paid out. Royalties will typically jump from 1% to 25% after payout.

[vhawk12]

Don,

 

In regards to recycling the water, I don't think a lot of people know that...the vast majority of the public still thinks that SAGD takes water right out of the Athabasca river and doesn't recycle it, but disposes of it back into the river. I believe that's why CAPP is putting out those commercials to try and combat misconceptions about these projects. It's fine that you question CAPP's info, I just ask that you question the info coming from other sources to the same degree, I would speculate you'll find the truth is somewhere in the middle.

 

What's new in technology? There was a post that listed a lot more processes than SAGD, many of which involve steam mixed with solvents, oxidation, injection of microbes that actually upgrade the bitumen in place (not a joke), microwave technology, there is tons of money being thrown into research right now for both clastic and carbonate in-situ projects. We'd be foolish to think that companies are not trying to find more cost effective ways to get this resource out of the ground.

 

It appears that you are attempting to perform your due diligence and get accurate numbers from the appropriate sources, so I for one would like to know what you end up finding out.

[DonAndersen]

megalops,

 

I see a three prices Heavy Crude, Crude Oil and Crude Bitumen.

 

Three questions:

 

Heavy Crude is after the upgrader?

 

Crude Oil is typical W. Cdn. production?

 

Crude Bitumen is before the upgrader?

 

 

vhawk12,

 

 

I realize that most of the water produced in oil sands systems may be recylced but I would have thought that consideration like reservoir contamination could be a possibly. Curious about the size of the "ancient" water aquifer. Must be one big SOB if it can sustain a an oil sands plant sucking on it.

 

 

 

And all,

 

I'm still perplexed @ the various information available. Scotiaback Commodity Pricing Index show that SCO, WTI about equal in price since January 09.

 

 

And for those folks that I miss lead.

 

The quote about the amount of money oil companies recieve was for oil after they bought it and the profit from refining.

There are really two components of the system. The producers who produce [or mine] the oil and those that refine it. In the case of bitumen there is a further step of the upgraders. How they factor in their profit, I haven't a clue.

 

For some companies, they produce, refine and market oil and oil products. Shell and Esso come to mind. They profit both going and coming.

 

 

Still learning.

 

 

regards,

 

 

Don

 

 

[Mudflap]

I spent a couple years working at CNRL Horizon directly for CNRL as a construction coordinator, working during the early days of site prep / process construction. CNRL based the entire Horizon project on a production cost of $30/ Barrel. Profit was anything above that. I read the reports.

I was also told its approx $13K to $15 profit per 797 truck of raw tar sand. These bad boys run 365 24 / 7, I am not sure how many loads are dumped into the crusher per hour but it is lots.

[Guest bobjones]

I spent a couple years working at CNRL Horizon directly for CNRL as a construction coordinator, working during the early days of site prep / process construction. CNRL based the entire Horizon project on a production cost of $30/ Barrel. Profit was anything above that. I read the reports.

I was also told its approx $13K to $15 profit per 797 truck of raw tar sand. These bad boys run 365 24 / 7, I am not sure how many loads are dumped into the crusher per hour but it is lots.

 

You need to consider the difference between Operating Profit and Profit. Operating Profit would be the amount you take home in Salary after business related expenses, but BEFORE Taxes, Interest, Depreciation, Mortgage etc.

 

Each Operator has a different operating cost. For In-Situ operators, the Steam Oil Ratio not only affects the amount of NG they use, but also the amount of water processing they do. The higher the SOR the higher the B?E point. There is a vast range of SORs among the various operators. For most operators, the operating cost per bbl is in the high $30s now and bitumen prices net of transpost range from $40-60/bbl. All exploration, capital, and corp costs come out of operting profit.

[vhawk12]

Not sure what you mean about contaminating the reservoir, do you mean the bitumen reservoir? Also, these ancient aquifers can be very large. I've seen a water zone over about 10 sections that is estimated to hold 150 million barrels of water in place. Having said that, there is a race to find water, both fresh (but not potable) and brackish as well as suitable disposal zones and lock it up because these projects go nowhere without adquate water supply.

[megalops]

Don,

 

Heavy crude is what I have been referring to as SCO. It is more properly called dilbit, although it can occur naturally and be produced from conventional wells in zones that produce sour oil. In oilsands context, it is just bitumen diluted with either naptha or lighter crude (end up around 17 degrees API). It is basically the minimum feedstock quality to go directly to the more complex refineries.

 

Crude oil is the reference price for most alberta conventional production. There are acutally several prices but this would be considered the overall benchmark.

 

Crude bitumen is the raw oilsands production (8 to 12 degreees API). It is full of sulpher and flows about as well as warm peanut butter.

 

The light SCO that Scotia referneces is bitumen after upgrading - the removal of all the sulphers and diluting to a grade typically better than WTI (36 degrees API).

 

 

[DonAndersen]

vhawk12,

 

I've worked as a Director with the Butte Action Committee with several Oil Companies in regards to substituting produced H20 for fresh in water flood projects. Big concern about contamination. Just wondered if the same thing applied to Tar Sands.

 

 

megalops,

 

 

Thanx for the "straightening out". This is exactly what I'm talking about. From the ScotiaBank Report, I'd think that all oil company BS is just that BS. Now the pricing is starting to make sense.

The real question that should be asked: If you guys took this long to partially educate a guys who was born in Alberta, worked for a oil Company in production for 40+ years, how in the God are the latte suckers from Toronto to figure it out.

 

 

To all,

 

Two more questions:

 

1] looks like bitumen has to be mixed with a solvent [ typically hydrocarbon condensate] to move it through pipelines So does that mean 2 pipelines from mine to upgrader - one for bitumen & condensate to upgrader and one for condensate>mine?

 

2] Does the upgrader remove the sulphur?

 

regards,

 

 

Don

[Harps]

Do you get free wi fi in your occupy calgary tent?

 

Ouch BJ, somebody sleeping on the bench where you eat lunch?

I don't recall any pro-occupy talk or even any anti-corporation blather. I asked some questions.

It's your type of response that teaches folks that corporate O&G isn't accountable to anybody asking questions and doesn't give a rats ass about what Albertans think.

 

 

vhawk12,

I believe under Alberta legislation you can't stop a RoW from coming across your property. The best thing a landowner can do is get some improvements (new gates, better roads, etc) and to monitor the work and conditions of the sites.

Part of the issue is your capitalist remark. The Federal and Provincial gov'ts subsidize the O&G industry. In a true capital market, there would be no subsidies. And on top of that, companies would have to start paying more for permitting (ie paying for the cost of a review under the Canadian Environmental Assessment Act as undertaken by a number of federal agencies).

We live and work in a social democracy... not a pure free market. Like it or not the elected gov't weighs the options (often poorly) and makes a decision about costs of operation, subsidies, taxes, royalties, immigration, and how many socks you can buy. This is supposed to be judged to see a benefit to all Canadians and /or our society.

 

The numbers I put up were found by a really quick internet search... they all came from CAPP and the oil company websites- nothing inflammatory.

I couldn't find out a true statement of how much money was made.

I really am curious about the profits and expenditures of O&G production and exploration. I don't work for O&G but deal with the companies on the ground and at higher planning levels.

 

A recent article in a paper stated that 45% of money spent in locally owned stores stays in the local economy while only 11% of money spent in chain stores. Those numbers are much less than I figured and I think it would be an interesting comparison to see where the money goes from "local O&G operations.

 

This thread has been great and full of info (except for some obvious trash), but I still don't know what is real or not.

Don, great questions and I'm learning a lot!

[Guest bobjones]

To all,

 

Two more questions:

 

1] looks like bitumen has to be mixed with a solvent [ typically hydrocarbon condensate] to move it through pipelines So does that mean 2 pipelines from mine to upgrader - one for bitumen & condensate to upgrader and one for condensate>mine?

 

2] Does the upgrader remove the sulphur?

 

regards,

 

 

Don

 

Don,

 

I think you can get better info from Wikipedia than here. For instance, no offense intended but I've never heard of dilbit referred to as SCO - dlibit is dilbit - roughly 1 part diluent (solvent) to 3 parts bitumen. SCO, Synthetic Crude Oil is extra heavy oil that has been upgraded.

 

Check out the plans for the Northern Gateway pipeline - exactly as you suggest - one pipeline for dilbit from near Edmonton, the other to return the diluent from Kitimat.

 

For a reasonable overview of a mining/upgrading process - refer to page 7 of http://www-static.shell.com/static/can-en/...ds_factbook.pdf You'll notice they don't show any of the by-products of their process other than tailings. Sulphur is recovered at various stages of the process.

[vhawk12]

Harps,

 

In a true free-form Capitalist economy, there would be no royalties either. I previously explained that the reason that the gov't subsidized O&G is to shoulder some of this risk in order for them to reap the rewards. So you're right, no subsidies and no royalties either. You may be right about a RoW, but I guess I was speaking more to the leasing of land by O&G companies, which if it's Crown land, the gov't charges an arm and a leg for, which is separate from the whole 'Royalty Regime'. Not sure what you mean by permitting...why would that increase in a purely capitalist economy? So yes, we live in a social democracy, but it sounds like a lot of people are thinking that a lot more focus on the "social" part is where we should be heading and I say, sure, go ahead and we'll see what happens.

 

Bob,

 

As far as Shell showing all the by products of their process, it would be a ton of chemical names that you would have to be a chemist to understand, so what value is that adding for the average reader? It's bad stuff, the public knows it and the companies know it, which is why there is soo much money being pumped into research in attempt to reduce the environmental impact of all facets of these projects.

[Guest bobjones]

Harps,

 

In a true free-form Capitalist economy, there would be no royalties either. I previously explained that the reason that the gov't subsidized O&G is to shoulder some of this risk in order for them to reap the rewards. So you're right, no subsidies and no royalties either. You may be right about a RoW, but I guess I was speaking more to the leasing of land by O&G companies, which if it's Crown land, the gov't charges an arm and a leg for, which is separate from the whole 'Royalty Regime'. Not sure what you mean by permitting...why would that increase in a purely capitalist economy? So yes, we live in a social democracy, but it sounds like a lot of people are thinking that a lot more focus on the "social" part is where we should be heading and I say, sure, go ahead and we'll see what happens.

 

Bob,

 

As far as Shell showing all the by products of their process, it would be a ton of chemical names that you would have to be a chemist to understand, so what value is that adding for the average reader? It's bad stuff, the public knows it and the companies know it, which is why there is soo much money being pumped into research in attempt to reduce the environmental impact of all facets of these projects.

 

Sulphur is not really a tough by-product to understand, nor is CO2, petroleum coke, lime, sand....and the list goes on. I think most folks can understand those.