Volumes – Tables 7 and 8

During 2003, the marketable production of crude oil and equivalent in Canada increased by a further 5.7%, to 144.8 million cubic metres from 137.0 million cubic metres. The production of non conventional crude oil (synthetic and crude bitumen) continued to increase, as it has done for the past several years, supplementing and replacing conventional crude from older fields. Although the production of synthetic crude dipped slightly in 2003, crude bitumen production recorded a 43.2% increase over last year. The production of marketable natural gas fell slightly by 3.2%, to 166.7 billion cubic metres from 172.2 billion cubic metres in 2002. 

Exports of Canadian natural gas to the U.S. declined again in 2003, falling to 101.5 billion cubic metres (-5.8%), after a decline of roughly 0.5% in 2002.

Exports of crude oil and equivalent to the U.S. again increased in 2003, rising by 5.1% to 89.1 million cubic metres from 84.8 million cubic metres in 2002.

Demand by Canadian refinery for domestically produced crude oil and equivalent increased marginally by 0.3% during 2003, to 53.2 million cubic metres from 53.1 million cubic metres in 2002. Crude oil imports increased by 3.1% during the year, rising to 52.7 million cubic metres from 51.1 million cubic metres in 2002.

Domestic sales of natural gas (including direct sales) rose by 3.6% in 2003, increasing to 72.8 billion cubic metres from 70.3 billion cubic metres in 2002. As noted above, field production in 2003 had fallen, but withdrawals from distributors’ storage had increased in order to supplement demand. Similarly, natural gas imports rose 46.6% in 2003, to go from 6.6 billion cubic metres to 9.7 billion cubic metres.

Values – Tables  4  and  5-1

In 2003, the total value of marketable production of hydrocarbons (including synthetic crude oil, natural gas, natural gas liquids, and elemental sulphur) rose sharply by 32.6% to $76.6 billion from $57.7 billion recorded in 2002. World prices for all crude oil and natural gas commodities were on the upswing during the year.

The value of crude oil and condensate (including pentanes plus) increased by 12.2% to $33.6 billion compared to $30.0 billion in 2002 and natural gas rose to $37.1 billion from $23.7 billion last year. The value of natural gas processing plant products ( propane, butane and ethane) increased sharply by 42.8% to $5.7 billion from $4.0 billion, and elemental sulphur (from natural gas) increased to $152.6 million from last year’s level of $62.6 million (an increase of 143.8%).

The Province of Alberta continued to dominate the overall value of marketable production in 2003, accounting for 73.6%, or $56.3 billion of the total $76.6 billion.

Expenditures – Conventional sector (Table 3 )

Operating expenditures (classified here as expenditures relating to field and well operations, natural gas processing and re-processing plant operations, taxes (excluding income taxes), other operating expenditures and royalties) increased by 18.9% in 2003, to $20.7 billion from $17.4 billion in 2002. This year, royalty payments accounted for 51.7%, field and well operations 39.0%, natural gas processing plants 7.4%, and taxes 1.9%.

The capital expenditures (classified as expenditures relating to geological and geophysical operations, exploration drilling, land acquisition and rentals, development drilling, production facilities, enhanced recovery and pressure maintenance, natural gas plants and other) increased markedly in 2003 to $23.8 billion from $18.0 billion in 2002. Exploration expenditures increased by 25.6% and development spending rose by 35.6%, for an overall increase of 32.5% in capital spending this year compared to 2002. Higher commodities prices were the main drivers behind this jump in activity.

The above expenditures exclude the non-conventional regions of Alberta and Saskatchewan containing the heavy oils and oilsands. These locations require very high inputs of capital necessary to extract the oil. See Text Table 1  for expenditure details relating to this sector.

Drilling – Table 2

There was a substantial increase in the total number of well completions (oil, gas, dry and others) during 2003, rising by 36.0% to 23,363 wells from 17,182 completions recorded in 2002. Exploratory drilling rose by 25.5% during the year to 5,074 completions from 4,044 wells, and development drilling increased by 43.7% to 15,372 wells from 10,694 completions. During 2003, the number of successful oil wells completed rose to 4,845 wells compared to 4,319 completions last year, and successful gas well completions increased markedly by 42.9% to 12,951 wells compared to 9,061 gas wells completed last year.

Reserves – Table 6 and text table 2

Remaining established reserves of conventional crude oil and equivalent (excluding oilsands and bitumen) continued to decline by year-end 2003 to 749,911,000 cubic metres from 796,324,000 cubic metres in 2002. The reserves replacement, or gross additions, amounted to roughly 50% of the volume of crude and equivalent produced during 2003. At this current rate of production, Canada’s reserves of conventional crude oil and equivalent have an estimated economic life (reserves life index) of 8.0 years, down slightly over 2002 due to the current production level.

Synthetic crude oil and developed bitumen reserves are currently estimated to be 1,151,440 000 cubic metres, an increase of 4.9% over 2002. The reserves replacement (gross additions versus production) amounted to 112%, and its reserves life index remains at 23.8 years, down marginally from 2002.

Marketable natural gas established reserves decreased by 4.2% in 2003, to 1,594 billion cubic metres from 1,664 billion cubic metres in the previous year. The volume of gross additions, by development drilling, replacing the production amounted to 59%. Based upon the amount of remaining established reserves and at the current level of production, the economic life of these reserves remains at 9.3 years, a marginal increase over 2002. Non-conventional natural gas prospects, such as coal bed methane and tight sands gas, continue to be extensive as field research heightens.