​The path to new oilsands major projects: This week’s best quotes

Image: Cenovus Energy

Here are some of the most interesting quotes from new coverage in the Daily Oil Bulletin for the week ending Jan. 12, 2018.

Rob Thummel, who helps manage $16 billion in energy assets at Tortoise Capital Advisors LLC., following legendary oil tycoon T. Boone Pickens’ decision to close his hedge fund, saying oil trading has lost its lustre.

“There’s no one, probably other than Warren Buffett, who’s seen and actually lived through all these cycles in oil.”

Analysts with Peters & Co., commenting on future prospects for greenfield oilsands project development, which would be improved by reductions in capital and operating costs, implementation of new technologies and expanded market access.

“At least one new pipeline is required to add confidence on takeaway and long-term differentials…To the extent that a combination of these changes can be advanced, we believe the returns on new in situ projects can be competitive in the US$50/bbl WTI range.

“A key on all aspects … is still the timing, as there are starting to be some more tangible results on the capital cost reduction side — but the impact from technology advancements continues to take longer than what many people have been hoping for.

“We still conclude that at least US$60 WTI is needed for new greenfield in situ projects with average resource characteristics to be attractive.”

Steve Spence, CEO of Osum Oil Sands, discussing the company’s decision to invest in a 6,000 bbl/d expansion of its Orion oilsands project.

“We have some fantastic assets; we’ve always liked the Cold Lake area because of the people, because of the quality of the oil and because of the performance of the asset there. We’re glad to be able to grow ourselves a platform that we can grow an awful lot in the future from.”

Ed Kallio, principal at consultancy Eau Claire Energy Advisory Inc., commenting on forward prices for natural gas, which are “in the tank” at $1.30ish for calendar 2018, and $1.50ish for calendar 2019.

“To clear more gas out of the Western Canada Sedimentary Basin we really need LNG exports but those projects don’t help short term. Oilsands demand will tick up slowly, as will Alberta power demand as coal is retired, but the lure of liquids is strong and gas comes with it, prolonging the glut. None of this is good news for gas-weighted producers.”

An unnamed official with an OPEC country, outlining concerns that the recent oil rally to the highest levels since May 2015 could prompt US shale companies to crank open their spigots and flood the market.

“We all are excited about the rally and want to see if it will be sustainable during the year, as it will certainly whet the appetite of shale producers.”