"...According to a study by Scotiabank of more than 50 plays across Canada and the U.S., Western Canadian plays — including those in the oil sands — cost less to produce on average than plays in the U.S. such as the Bakken in North Dakota, and the Eagle Ford and the Permian Basin, both in Texas.
“Investors may have the perception that Canadian oil plays are less cost-competitive than the new ‘light, tight’ oil plays in the United States, which is not the case,” said Patricia Mohr, vice-president of economics and commodity markets specialist at Scotiabank.
According to the Scotiabank study, released Thursday, the Saskatchewan Bakken offers one of North America’s best deals with a break-even cost of US$44.30 a barrel — including a 9% after-tax return.
Oil from in-situ oil sands projects in Alberta is produced at a break-even cost of US$63.50 on average, and oil from existing integrated oil sands mining projects has a break-even cost of US$60 to US$65, also including a 9% after-tax return, making them very resilient even if oil prices weaken significantly.
Some of the non-oil sands heavy oil plays, such Alberta heavy oil, yield some of the best profit investment ratios across North America, Ms. Mohr said.
“We have a competitive oil sector on the cost side, and technology development has been key,” Ms. Mohr said.
| 2/21/2014 | | | 2/21/2013 | 13/14 | Avg. Price | |||||
| Crude Oil | Close | Change | | | Close | Change | YTD | |||
| Synthetic Crude | ($C/bbl) | 111.22 | -56 | ¢ | | | 95.17 | 16.05 | 106.82 | |
| Western Canada Select | ($C/bbl) | 87.30 | 22 | ¢ | | | 67.67 | 19.63 | 84.32 | |
| Differential (WTI/WCS) | ($C/bbl) | 26.43 | -59 | ¢ | | | 27.49 | -1.06 | 22.05 | |
| Differential (WTI/Synthetic) | ($C/bbl) | 2.84 | 34 | ¢ | | | -1.02 | 3.86 | -0.43 | |
| | | |||||||||
| WTI Cushing Spot | ($US/bbl) | 102.50 | -42 | ¢ | | | 92.44 | 10.06 | 96.87 | |
| NYMEX WTI Apr14 | ($US/bbl) | 102.20 | -55 | ¢ | | | 92.84 | 9.36 | 96.85 | |
| NYMEX WTI 12 Month Strip | ($US/bbl) | 97.15 | -32.00 | | | 93.46 | 3.69 | 94.29 | ||
| NYMEX WTI 2015 Strip | ($US/bbl) | 90.02 | -11 | ¢ | | | 91.65 | -1.63 | 86.86 | |
| ICE Brent Apr14 | ($US/bbl) | 109.85 | -45 | ¢ | | | 113.53 | -3.68 | 107.64 | |
