IndianOil may lead oilcos' Canadian oil sands foray
New Delhi   04-Dec-2007
IndianOil companies are now eyeing Canada. Persisting with their policy of acquiring oil & gas assets abroad, domestic oilcos are now planning to form a consortium to jointly explore Canadian oil sands representing one-third of the known oil reserves in the world. IndianOil, badly hit by global crude oil price volatility, is expected to play a lead role in this venture. Oil majors like Shell Exxon Mobil and Total are involved in these projects and China is aggressively looking at acquiring some of these assets. "IOC has proposed to form a consortium for jointly participating in the Canadian oil sands opportunities. Views of federation of oil companies Petrofed has been sought," a source in the petroleum ministry, said. "Some of the independent oil sands companies which represent potential initial oil sands investment opportunities by way of partnering, equity investments or acquisition are North American Oil Sands Corporation, MEG Energy, JACOS, Synenco Energy. Connacher Oil & Gas, PetroBank Energy Resources and Oil Sands Quest Inc," an IndianOil official said. "The present rate of production from Canadian oil sands is around 1.5 million barrel per day, which is expected to grow to 2.7 million barrel per day by 2015. Worldwide investment lined up for different oil sands projects is $60 billion," the official said. Experts say that investments in the Canadian oil sands make even more economic sense when global crude is touching $ 100/barrel. Commercial production of oil from tar sands becomes viable if crude sells above $30/barrel. Alberta's (Canada) oil sands deposits are stated to be the second only to the Saudi Arabia reserves and have potential to satisfy the world's demand for oil for the next century. Alberta's recognised reserves are estimated at 175 billion barrels of crude. Global oil explorers are picking up equity stake in these assets. Recently, Japanese explorer Inpex Holdings bought a 10% stake in the Joslyn oil sands project in Alberta from Total. In the Canadian sands, the oil is bound up in black bituminous sand close to the surface. Oil is separated from the sand by heating.