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Arctic Gas Symposium American Conference Institute. November 18-19, 2002 The Renaissance Houston Hotel Houston, Texas. Arctic Gas Symposium Canadian Oilfield Services Perspective. Discussion: Canadian Drilling Activity Forecast Canadian Arctic Pipeline Kyoto Protocol. Canadian Drilling - PowerPoint PPT Presentation
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Arctic Gas Symposium American Conference Institute
November 18-19, 2002November 18-19, 2002
The Renaissance Houston HotelThe Renaissance Houston Hotel
Houston, TexasHouston, Texas
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Discussion:Discussion:
Canadian Drilling Activity ForecastCanadian Drilling Activity Forecast Canadian Arctic PipelineCanadian Arctic Pipeline Kyoto ProtocolKyoto Protocol
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective Document Highlights:Document Highlights:
Total Meters Drilled by Area, By Status (Gas, Oil, etc.)Total Meters Drilled by Area, By Status (Gas, Oil, etc.) Average Meters Drilled per Well by AreaAverage Meters Drilled per Well by Area Break-Out: Directional, Horizontal, VerticalBreak-Out: Directional, Horizontal, Vertical Break-Out: Developmental, Exploratory, Re-entryBreak-Out: Developmental, Exploratory, Re-entry Average License to Spud Days per AreaAverage License to Spud Days per Area Average Spud to Rig Release Days per AreaAverage Spud to Rig Release Days per Area Top 20 Operators by AreaTop 20 Operators by Area License issued by Target Depth per AreaLicense issued by Target Depth per Area
2002 Commodity Price Assumptions:2002 Commodity Price Assumptions:
Avg. Gas price:Avg. Gas price: CDN (AECO) $4.00/McfCDN (AECO) $4.00/Mcf Avg. Oil price:Avg. Oil price: US (WTI) $26.00/barrelUS (WTI) $26.00/barrel
Wells Drilled (Rig released):Wells Drilled (Rig released): 15,10015,100
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Arctic Gas SymposiumCanadian Oilfield ServicesPerspectivePSAC 2002 Rig Release Forecast Breakdown:PSAC 2002 Rig Release Forecast Breakdown:
2002 October2002 October UpdateUpdate
AB:AB: 11,210 11,210 BC:BC: 635 635 SK:SK: 3,050 3,050 MB:MB: 85 85 North 60North 60 1212 Other:Other: 108 108 Total:Total: 15,100 15,100
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Well Type Breakdown:Well Type Breakdown:
2002e2002e
GasGas 61.6%61.6%
OilOil 28.1%28.1%
OtherOther 10.3%10.3%
Capital Expenditures (C$billions):Capital Expenditures (C$billions):
2002e2002eDrill & CompleteDrill & Complete
Capital ExpendituresCapital Expenditures $6.0 $6.0
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
2003 Highlights:2003 Highlights:
Higher well countHigher well count Strong commodity pricesStrong commodity prices Increased activity in Foothills and NEBCIncreased activity in Foothills and NEBC Strong shallow gas drillingStrong shallow gas drilling
2003 Commodity Price Assumptions:2003 Commodity Price Assumptions:
Avg. Gas price:Avg. Gas price: CDN (AECO) $4.75/McfCDN (AECO) $4.75/Mcf Avg. Oil price:Avg. Oil price: US (WTI) $24.25/barrelUS (WTI) $24.25/barrel
Wells Drilled (Rig released):Wells Drilled (Rig released): 16,50016,500
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Year to Year Comparisons (CND $Billions):Year to Year Comparisons (CND $Billions):
Drill & CompleteDrill & CompleteYearYear Capital ExpendituresCapital Expenditures2003e2003e $7.0 $7.02002e2002e $6.0 $6.02001e2001e $9.0 $9.02000e2000e $8.0 $8.0
Source: PSAC, FirstEnergy, ARC FinancialSource: PSAC, FirstEnergy, ARC Financial
Arctic Gas SymposiumCanadian Oilfield ServicesPerspectivePSAC 2002/3 Rig Release Forecast Breakdown:PSAC 2002/3 Rig Release Forecast Breakdown:
20022002 2003 2003 ForecastForecast ForecastForecast
AB:AB: 11,210 11,210 12,350 12,350 BC:BC: 635 635 805 805 SK:SK: 3,050 3,050 3,150 3,150 MB: MB: 85 85 80 80 North 60North 60 12 12 15 15 Other:Other: 108 108 100 100 Total:Total: 15,100 15,100 16,500 16,500
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Well Type Breakdown:Well Type Breakdown:
2003e2003e 2002e2002e
GasGas 62.3%62.3% 61.6%61.6%
OilOil 27.3%27.3% 28.1%28.1%
OtherOther 10.4%10.4% 10.3%10.3%
Arctic Gas SymposiumCanadian Oilfield ServicesPerspectiveNorthern CanadaNorthern Canada
Conventional Crude Oil Reserves Conventional Crude Oil Reserves (Billion Barrels)(Billion Barrels) CanadaCanada 4.74.7 North 60North 60 0.10.1
Gas Reserves (Tcf)Gas Reserves (Tcf) CanadaCanada 65.665.6 North 60North 60 6.0 6.0
Source: CAAP, PSAC
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Northern Canada PotentialNorthern Canada Potential
Potential Conventional Potential Conventional Crude Oil Reserves (Billion Crude Oil Reserves (Billion barrels)barrels) North 60North 60 2.02.0
Potential Gas Reserves (Tcf)Potential Gas Reserves (Tcf) North 60North 60 6060
Source: PSAC
Arctic Gas SymposiumCanadian Oilfield ServicesPerspectiveNorthern CanadaNorthern Canada
Oil production since 1943, Oil production since 1943, currently 25,000 bbl/daycurrently 25,000 bbl/day
Gas production since 1972, Gas production since 1972, currently 0.15 Bcf/daycurrently 0.15 Bcf/day
Approximately 1,400 wells Approximately 1,400 wells drilled to date versus 335,000 for drilled to date versus 335,000 for the rest of Canadathe rest of Canada
Source: CAAP
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Canadian Crude OilCanadian Crude Oil North 60North 60 Production – 2.2 million bbl/day 25,000 bbl/dayProduction – 2.2 million bbl/day 25,000 bbl/day Exports – 1.3 million bbl/dayExports – 1.3 million bbl/day
Canadian Natural GasCanadian Natural Gas Production – 17.4 Bcf/day 0.15 Bcf/dayProduction – 17.4 Bcf/day 0.15 Bcf/day Exports – 10.6 Bcf/dayExports – 10.6 Bcf/day
Source: CAAP
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Mackenzie Gas PipelineMackenzie Gas Pipeline
Project DevelopersProject Developers Imperial OilImperial Oil Conoco CanadaConoco Canada Shell CanadaShell Canada Aboriginal Pipeline Aboriginal Pipeline
GroupGroup
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Mackenzie Gas PipelineMackenzie Gas Pipeline
Developing onshore natural Developing onshore natural gas fields in the Mackenzie gas fields in the Mackenzie Delta (6 Tcf currently)Delta (6 Tcf currently) Taglu (3 Tcf)Taglu (3 Tcf) Parsons Lake (1.8 Tcf)Parsons Lake (1.8 Tcf) Niglintgak (1 Tcf)Niglintgak (1 Tcf)
Source: Imperial Oil
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Mackenzie Gas PipelineMackenzie Gas Pipeline
Project CostsProject Costs C$3 Billion – pipeline C$3 Billion – pipeline
constructionconstruction C$1 Billion – field C$1 Billion – field
developmentdevelopment
Source: Imperial Oil
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Mackenzie Gas PipelineMackenzie Gas Pipeline
Expected Production Rates Expected Production Rates (three existing fields)(three existing fields) 800 Mcf/day to 1.0 Bcf/day 800 Mcf/day to 1.0 Bcf/day
in natural gas productionin natural gas production 10,000 bbl/day to 15,000 10,000 bbl/day to 15,000
bbl/day in associated NGLsbbl/day in associated NGLs
Source: Imperial Oil
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Mackenzie Gas PipelineMackenzie Gas Pipeline
Anticipated TimingAnticipated Timing Submission of Submission of
applications for regulatory applications for regulatory approval in 2003approval in 2003
Production start up in Production start up in 2007 to 20082007 to 2008
Source: Imperial Oil
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Mackenzie Gas PipelineMackenzie Gas Pipeline
Initial capacity of 1.2 Initial capacity of 1.2 Bcf/dayBcf/day
Expandable to 1.9 Bcf/day Expandable to 1.9 Bcf/day through additional through additional compression facilitiescompression facilities
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Nature of Northern WorkNature of Northern Work
SeasonalSeasonal CyclicalCyclical Long TermLong Term ExpensiveExpensive
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
““Managing Expectations”Managing Expectations”
ProducersProducers Local Aboriginal communities/businessesLocal Aboriginal communities/businesses Service suppliersService suppliers GovernmentGovernment
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Local Communities/BusinessLocal Communities/Business
Go slow….take the time to do it rightGo slow….take the time to do it right LifestyleLifestyle JobsJobs Training programsTraining programs
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective Kyoto Protocol – Canadian Situation:Kyoto Protocol – Canadian Situation:
Target CO2 reductions – 5% below 1990Target CO2 reductions – 5% below 1990 1990 CO2 emissions – 607 mega tonnes 1990 CO2 emissions – 607 mega tonnes
(2% world emissions)(2% world emissions) 2010 Projections - 810+ mega tonnes – 2010 Projections - 810+ mega tonnes –
(30% reduction to meet target)(30% reduction to meet target)
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Kyoto Protocol – Canadian Situation:Kyoto Protocol – Canadian Situation: RatificationRatification
Full-SoftFull-SoftCanadian Parliament December 2002Canadian Parliament December 2002
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Kyoto Protocol – Canadian Situation:Kyoto Protocol – Canadian Situation: RatificationRatification
Full-SoftFull-SoftCanadian Parliament December 2002Canadian Parliament December 2002
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective““What we need to do is end the debate about What we need to do is end the debate about
ratification and begin being clear about what the ratification and begin being clear about what the measures are that we’re going to need to measures are that we’re going to need to implement. Nobody is going to come in and seize implement. Nobody is going to come in and seize our property or charge us a penalty if we don’t our property or charge us a penalty if we don’t achieve the (Kyoto) targets…..”achieve the (Kyoto) targets…..”
John Manley, Finance MinisterJohn Manley, Finance MinisterNovember 14, 2002November 14, 2002Calgary HeraldCalgary Herald
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective Kyoto Protocol – Poll Results:Kyoto Protocol – Poll Results:
Jun ’02Jun ’02 Nov’02 Nov’02
Pro Con Pro Con Pro Con Pro Con
CanadaCanada 86%86% 14% 14% 74%74% 26% 26%
OntarioOntario 87%87% 13% 13% 75%75% 25% 25%
AlbertaAlberta 72%72% 28% 28% 40%40% 60% 60%
Arctic Gas SymposiumCanadian Oilfield ServicesPerspective
Kyoto Protocol – Canadian Situation:Kyoto Protocol – Canadian Situation: Personal ViewsPersonal Views