Canada\u0027s oilsands may be the \u0027last barrel standing\u0027 as the world shifts away from fossil fuels, says a new report. Read more
The difference is in the method of extraction and cost structure of oilsands projects. Oilsands bitumen is extracted by two methods. When bitumen is close to the surface, it is dug out with heavy equipment and trucked to a processing facility.Article content
Both methods require higher upfront capital investments than building a conventional oil well. But once these investments have been made, oilsands projects are able to maintain, or even increase, production over several years or decades with relatively small marginal costs per barrel, says the report.
Because of this the oilsands can weather short-term price dips as long as the WCS price doesn’t stay below $40 a barrel persistently. Conventional oil producers generally stop or slow investments in production when the West Texas Intermediate price is below US$45.Article content While low crude prices might not entice oilsands producers to start new projects, it is their best interests to keep producing at existing operations because the upfront investment has already been made, Fellows said.
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