Measuring performance: 2016 oilsands project analytics

Operators at the Sunrise SAGD project, operated by Husky Energy. Image: BP

For the most part, it doesn’t matter what the oil price is. Every blink that your eye makes is another moment that the oilsands industry keeps moving.

The shovels keep digging, heavy haulers keep rolling, steam keeps injecting and pumps keep pumping. All producers can do is try to do all of it more efficiently to get more product for less investment.

The current market environment makes it all the more critical that each task of these processes results in trends that raise the bar.

Here’s a review of 2015-2016 data from the Daily Oil Bulletin , CanOils and Oilsands Review .

Thermal oilsands production May 2015-May 2016

Projects under 75,000 bbls/d: Four new SAGD projects with capacity less than 75,000 bbls/d started producing bitumen in 2015: Husky Energy Sunrise, Athabasca Oil Corporation Hangingstone and Sunshine Oilsands West Ells. Sunshine's project is not include in the table because according to Alberta Energy Regulator (AER) data, it has not yet realized production over 100 bbls/d.

Projects over 75,000 bbls/d: In 2015, Imperial Oil and ConocoPhillips Canada both started thermal expansions to a project totalling capacity over 75,000 bbls/d; Imperial Oil added 40,000 bbls/d of capacity at Cold Lake, while ConocoPhillips added 118,000 bbls/d of capacity at Surmont. In the fourth quarter of 2015, Suncor achieved first oil from its 23,000 bbl/d Firebag debottleneck project, and Cenovus Energy completed its 22,000-bbl/d optimization at Christina Lake.

The Fort McMurray wildfires in spring 2016 dramatically impacted oilsands production levels in May.

Thermal oilsands projects quarterly netbacks and operating costs (Q1/2015-Q1/2016)

SAGD producers are in an all-out war to reudce operating costs and improve netbacks at their facilities due to the low price environment, some achieving more success than others.

During the first quarter of 2016, the price of WTI dropped to the lowest point so far in teh current rout, approaching $25/bbl. The impact of depressed prices was clearly evident in first quarter reporting, but second-quarter results are expected to improve with WTI having moved closer to $50/bbl during the period.

Thermal oilsands projects steam-to-oil ratios (May 2015-May 2016)

Ongoing project SOR leaders Cenovus Christina Lake, Devon Jackfish and MEG Christina Lake were joined in May 2015-May 2016 by strong performance at new projects Pengrowth Lindbergh and Canadian Natural Resources Kirby South. Ongoing ramp-up at Husky Sunrise is evident at the other end of the chart.

Oilsands mined bitumen and synthetic crude oil production (March 2015-March 2016)

The start-up of Imperial Oil's second phase at Kearl in June 2015 resulted in the combined addition (from both phases) of 220,000 bbls/d of mining production capacity to the oilsands in the last three years. AER data to March 2015 shows this newest oilsands mine is producing above its nameplate capacity.

Nexen stopped producing synthetic crude oil from its Long Lake upgrader following a fatal explosion in January 2015, and has since announced it will shut down the facility.

Oilsands mining and upgrading projects quarterly netbacks and operating costs (Q1/2015-Q1/2016)

Synthetic crude oil producers have an advantage in price realization to stand-alone bitumen producers as they receive prices closer to WTI, evidenced by continued positive netbacks publicly disclosed through the downturn so far. All oilsands mining/upgrading operators that publicly disclose operating costs have been able to realize reductions over the last year, and continue efforts to drive down these expenditures.

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