Page 27 - Sphere No.14 (Jul 2005)

IL IS NEVER FAR

from the headlines these days.

Both the level of accessible oil reserves and the

cost of bringing oil to market are perpetually

hot topics. Almost every day, it seems, there

is a story about fluctuating oil prices or the

urgent need for new sources of supply.

And now there is a new development –

enormous reserves of oil in tar-soaked

sands that will ensure supplies for a long

time to come. Let’s start with a look at the

background to this exciting story.

There are no signs that the world’s seemingly

insatiable appetite for oil will decline and many ana-

lysts are forecasting that prices will remain at historically

high levels. In April new research from Goldman Sachs sug-

gested that we are destined for a long period of volatile oil

prices with “super-spikes” of up to US$105 per barrel.

But it’s not just a question of cost. Many of the large fields

in such areas as Alaska, the North Sea and the Gulf of Mexico

are close to being worked out and new sources must be devel-

oped to replace them. The International Monetary Fund

recently stated that increased global capacity of three million

to five million barrels per day (BPD) is required “to ensure the

stability of the world economy”.

The combination of rising prices and declining reserves in

established fields is encouraging a search for new growth

areas. But undeveloped resources are often difficult and cost-

ly to exploit, such as “ultra-deep” offshore wells, or in poten-

tially unstable areas, such as west Africa or the Caspian.

Against this background, the oil industry is increasingly look-

ing to “unconventional” hydrocarbons as a new source of sup-

ply. Unconventional hydrocarbons tend to be more expensive

and more difficult to convert into petroleum products than reg-

ular oil reserves. But constantly growing demand and rising

prices are making them economically attractive, persuading the

industry to take non-traditional sources very seriously.

Hutchison company Husky Energy is very active in the move to

secure oil supplies through the development of new resources.

Buried treasure in the Canadian west

For the largest and most important of these unconventional

sources of oil, look west – to Alberta in western Canada.

This huge, sparsely populated province is the setting for one

of the hottest stories in the oil business today.

Alberta has long been a treasure-trove for palaeontologists,

seeking answers about the origins of life among its fossils and

dinosaur remains. But now another sort of treasure is starting

to be extracted in potentially vast

quantities. For Alberta’s oil sands,

also known as tar sands, consti-

tute the largest known petroleum

deposit on the planet.

S

PHERE

25

Left:

Fuel for the future:

Husky is actively

developing

non-traditional

oil reserves

PHOTO: COURTESY OF HUSKY ENERGY