March 26 2009 / by Garry Golden / In association with Future Blogger.net
Category: Energy Year: General Rating: 2
Canada is starting to flex its muscle as a major player in the world of energy around non-conventional hydrocarbon resources.
This week, Suncor, the number two producer of tar sands, will merge with Petro-Canada. The new energy giant Canadian company could become an expert in developing less environmentally damaging methods for utilizing non-conventional resources in North America and around the world.
The combined company will have ‘approximately 7.5 billion barrels of oil equivalent (boe) of proved (developed and undeveloped) and probable reserves, on top of an estimated contingent resource base of approximately 19 billion boe. It will also have significant refining capacity of 433,000 barrels per day (b/d) and a strong Canadian retail brand in Suncor.'
Preempting the Inevitable Contraction of the Hydrocarbon Sector
Energy analysts expect a wave of mergers as companies find it difficult to grow reserve assets through traditional exploration and development. Cash rich companies might find it easier to expand reserve totals by acquisition.
Future sucess might also be based on an ability to develop non-conventional resources like carbon-heavy 'tar sands' and deep water reserves. So for Canada's leading energy companies it was important to merge before being acquired.
According to Suncor CEO Rick George "The combined portfolio boasts the largest oil sands resource position, a strong Canadian downstream brand, solid conventional exploration and production assets, and low-cost production from Canada's east coast and internationally."
Canada's Vision as a Resource Giant
For better or worse, non-conventional energy resources are likely to expand in the years ahead. (Especially if we reach 'peak production' of conventional oil sooner rather than later.)
The key will be finding ways to reduce the carbon footprint of these tremendous resources.
For Canada the future is clear - cash in on natural resources and start partnering with investors from China and other emerging economies around the world who are craving access to energy resources.
Energy analysts are wondering ‘who’s next’ in terms of Canada-based energy company acquisitions. And there are even bigger questions about the ‘grand strategy and vision’ and plans for developing Canada’s and the world’s non-conventional oil resources (e.g. tar sands). If we want to address climate change, we would be wise to balance our investments in solar and wind, with technologies that deal with these carbon heavy fuels.
Image Credit: Suncor Two heavy haulers unloading
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