Growth in Albertas Oil Sands

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Growth in Albertas Oil Sands Industry
Buyer Seller Forum 2004 By Bill
Almdal Regional Issues Working Group March 24,
2004
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Todays presentation

• Role of the Regional Issues Working Group
• Growth in the oil sands industry
• Sharing the benefits locally
• Managing the impacts
• Investment potential
• Summary

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Regional Issues Working Group Vision Statement

• To provide a proactive process which promotes
  the responsible, sustainable development of
  resources within the Regional Municipality of
  Wood Buffalo for the benefit of all stakeholders.
  

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What we do

• What we do
• Facilitate planning for growth
• Facilitate effective and efficient resolution of
  issues
• Involve all of the resource developers and
  affected stakeholders in planning
• Develop plans for sharing benefits with
  Aboriginal stakeholders

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Regional Issues Working Group Members
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Stakeholders
Some of the organizations that participate on
RIWG Sub-Committees Oil Sands Companies AB
Economic Develop. Personal Support Network AB
Dept. of Energy Mark Amy Centre AB Human
Resources Regional Municipality of Wood Buffalo
Finning Canada Canadian Assoc. of Petroleum
Producers Fort McKay First
Nation Y.M.C.A. Hospital Keyano
College Athabasca Chipewyan First
Nation Northern Alberta Development Council
Devonian Properties Diversified
Transportation Ft. McMurray School Boards Ft.
McMurray Chamber of Commerce Real Estate
Board, Inland-Leigh Alberta Transportation
Athabasca Tribal Council Aboriginal Affairs
Northern Dev. C.E.M.A., Remax,
Epcor Transmission Administrator of AB AMI,
Wilson Industries National Energy Board
The Salvation Army Family Services
Agency Lokken Career Training
Family Crisis Society Hammond
Mediation Consulting
ASPI, AADAC, Pastew Place, AWASAK , Some Other
Solutions
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Regional Issues Working Group Sub -Committees

• Aboriginal Affairs
• Addictions Mental Health
• Co-generation
• Communications
• East Side Utility Corridor
• Education Jobs
• Health Services

• 8. Housing
• 9. Sustainable
• Community
• Indicators
• Regional
• Economics
• 11. Transportation

February 2003
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RIWG Issues Management Process
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Oil Sands Delivered

• National Oil Sands Task Force predictions
• Initial 1994 forecast - 5.7 billion in new
  capital
• projects over 25 years
• 1996 forecast - 21 billion over 25 years

• Actual spending to date (1996 2002)
• 23 billion over past 7 years!
• Estimated 2003 spending - 3.4 Billion
• 30 billion over the next 7 10 years

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Status of Projects in the Regional Municipality
of Wood Buffalo February 2004
PROJECTS UNDER AEUB APPLICATION Opti-Nexen
Long Lake (approved) Syncrude Stg. 3
(approved) ConocoPhillips Surmont (approved)
CNRL Horizon (approved) Petro-Canada
Meadow Creek (pending) Shell Jackpine 1
(approved) Suncor Voyageur Phase 1
Albian Sands Phase 2 Terasen
Pipelines Corridor Pipeline Husky
Tucker Lake Petrobank- Orion Whitesands Pilot
Deer Creek Energy Joslyn Devon Canada -
Jackfish PROJECTS UNDER PUBLIC DISCLOSURE Suncor
Voyageur Ph. 2 - 4 Petro-Canada Lewis
Synenco Northern Lights Enbridge
Pipeline JACOS Hangingstone
Imperial Oil Kearl Mine Husky - Sunrise
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Seven Oil Sands Projects Under Construction in
2004
Project Expected
Production Deer Creek Energy Joslyn Pilot
2,000 bpd Suncor Firebag (complete)
35,000 bpd Syncrude Aurora 2/UE1
110,000 bpd Opti/Nexen Long Lake
Pilot 3,000 bpd Husky Tucker
Lake 30,000 bpd CNRL
- Primrose/Wolf Lake 60,000
bpd ConocoPhillips- Surmont 26,000
bpd
TOTAL 266,000 bpd
Other projects Petro-Canada - MacKay River
Co-gen Plant Dover to Deerland transmission line
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Annual Oil Sands Capital Expenditure Forecast -
100 Case

• Forecasts have steadily increased

Based on all announced projects proceeding
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Annual Oil Sands Capital Expenditures30B
forecast over next decade25B in the Athabasca
Region
2002 Data
Discounted Case (most likely projects proceeding)
June 2003
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Oil Sands Production Forecast 1 million bbl/day
in 2003 2 million by 2011
2001 Data 2002 Data
Upgraded Crude
Bitumen
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Comparative Oil Reserves
1.7 Trillion Barrels estimated to be in place
in Albertas oil sands 177 Billion Barrels
established reserves 311 Billion Barrels -
ultimately recoverable with current technology
Data Source Alberta Energy Utilities Board
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North American Oil Reserves Remaining as of
December 31, 2000
Reference (EUB) (CAPP) (IPE) (US DOE)
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Oil Sands Potential to Increase Export Volumes
to the U.S.
North American Crude Oil Market
Imports
Future Potential
Under Evaluation
Oil Sands Production
Current / Construction
North American Conventional Production (Includes
natural gas liquids)
Sources Energy Information Administration
(EIA), Projections EIA, AEO2002 National Energy
Modeling System Athabasca Oil Sands Developers
July 2003
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Sharing the benefits
Regional Economic Development Link

• Business retention
• Business development
• Business formation

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Sharing the benefits

• Athabasca Tribal Council (ATC)
• The ATC-All Parties Core Agreement was signed
  January 8, 2003 by all 5 Chiefs of the Regional
  Municipality of Wood Buffalo and 15 executives
  representing the regions oil sands, energy, and
  pulp and paper developers.
• Metis-Industry Consultation Terms of Reference
  (MICA)
• The Terms of Reference is a one-year pilot
  funded by the RIWG member companies to benefit
  the Métis people in the Regional Municipality of
  Wood Buffalo.

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Fort McMurray Population Forecast
Data Source RIWG Nichols Applied Management
June 2003
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Average Inventory of Listed Housing Units - Fort
McMurray
Includes Single Family, Multi-Family, Duplex,
Mobiles and Mobile with Lot Listings
Data Source Ft. McMurray Real Estate Board
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Fort McMurray Single Family Homes Listed, Sold
Average Price Comparison
Average Price
Units
Dollars
Data Source Ft. McMurray Real Estate Board
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Oil Sands Forecast of Permanent New Operations
Jobs
April 2003
Number of Jobs
Estimates only includes replacement hires
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2003 OutlookRevenues to Alberta
GovernmentExisting and new oil sands projects
Source Nichols Applied Management
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Oil Sands 60 of Income Effect Outside Alberta
Alberta 40
Atlantic 8
Other West 6
Quebec 19
Ontario 27
Source NOSTF Report (1995)
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Co-gen Installed CapacityMid Range Case
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Co-gen Power Exports Mid-range Case
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Oil Sands Natural Gas Demand Estimate
Data Source Tom McCann and Assoc. June 2003
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Opportunities abound for entrepreneurs in the
developing oil sands
240T and over
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The future of oil sands development is positive

• 23 billion spent since 1996 means operations for
  at least another 30 years
• Industry are working together with stakeholders
  to address common issues in a proactive manner
• More companies are now participating in RIWG
• RIWG information is widely used by governments,
  industry, investors and others to better plan for
  the future
• The RIWG issues management process is seen as a
  successful model by groups all over North America

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Disclaimer
This presentation contains forward-looking
information on future production, project
start-ups and future capital spending. Actual
results could differ materially due to market
conditions, changes in law or government policy,
changes in operating conditions and costs,
changes in project schedules, operating
performance, demand for oil and gas, commercial
negotiations or other technical and economic
factors.