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CEE Think Day on Canada Energy Issues

CEE Think Day on Canada Energy Issues. Overview on Key Energy Sector Developments & Issues Roland Priddle. First a word of appreciation…. …to those who have done so much, particularly in the last 5 years, to make Canada the global energy hotspot that it now is…. Why Canada?.

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CEE Think Day on Canada Energy Issues

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  1. CEE Think Day on Canada Energy Issues Overview on Key Energy Sector Developments & Issues Roland Priddle CEE Canada Think Day March 9, 2006

  2. First a word of appreciation… …to those who have done so much, particularly in the last 5 years, to make Canada the global energy hotspot that it now is… CEE Canada Think Day March 9, 2006

  3. Why Canada? • Extraordinary policy and regulatory stability since mid-80’s (recent political change doesn’t mean policy change) • Great experience of market functioning in NAFTA context (good public buy-in) • Where else can you purchase in-place oil (well, bitumen) for 1 cent/barrel?* *Chevron: 7.5 billion barrels in place for $70 million—announcement March 2, 2006 CEE Canada Think Day March 9, 2006

  4. Where else can you grow? • Colombia? Nigeria? Peru? Russia (good luck BP)? Venezuela? • Other OPEC and Mexico, doors are locked • Trinidad obviously interests, N Sea good opportunities for big projects in the north, “work-overs” in the south, plus Buzzard • Just what are the others…? OK you Texans, USA Gulf of Mexico! CEE Canada Think Day March 9, 2006

  5. Highlights • Oil sands again and again (Dr Knapp) • CBM--want to learn more (Mr Kin Chow) • Significant high productivity onshore gas wells still coming-in (Talisman) • Conventional gas shows surprising strength. Issues: • Capability of drilling fleet • (as always) Future prices CEE Canada Think Day March 9, 2006

  6. Consumer-level dereg? • Gas—patchwork • Electricity—an even worse patchwork • Can’t see political will to significantly advance either CEE Canada Think Day March 9, 2006

  7. Lowlights • East Coast gas: Sable, Deep Panuke and the continental slope disappointments • East Coast oil: no large new pools--working off the discovery inventory of the 1980’s • West Coast oil and gas: 1960’s time warp CEE Canada Think Day March 9, 2006

  8. Still unfolding • Mackenzie Gas Project (MGP) • Mackenzie gas (and oil) potential outside of the three MGP anchor fields (watch for results of Devon’s ‘06 well) • Alaska pipeline: • New Canadian minister*, new energy • Who are we waiting for? (*Jim Prentice, Indian & Northern Affairs—why? Because “pipelines in the North=First Nations”?) CEE Canada Think Day March 9, 2006

  9. And what about utilities? • Didn’t suffer from Enron blight • Exited Argentina just in time • Cdn pipes ambitious for growth: • Enbridge “Spearhead”, “Gateway”(?), TCPL Foothills Alaska • Cdn utilities present attractive targets for larger USA companies: • Westcoast, Terasen CEE Canada Think Day March 9, 2006

  10. Issues • There are no big policy, fiscal or regulatory issues for the western basin • First fundamental issue is “will global environment support currently-foreseen activity levels?” • Second issue is “can the industry mobilize the people and materiel to support those levels while reasonably containing costs?” CEE Canada Think Day March 9, 2006

  11. Conclusion • The Western Basin looks extremely strong • The East Coast has been rescued by high commodity prices • The West Coast continues in a 30-year plus limbo • The North frankly hasn’t been handled well by anyone (exception: the Norman Wells project of the early 80’s) CEE Canada Think Day March 9, 2006

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