The Canadian Arctic Oil & Gas Exploration & Production Market Forecast 2011-2021

03 Oct 2011 • by Natalie Aster

Much of Canada’s Arctic onshore has proved fruitful for oil and gas discoveries but the distance to market, high cost of development and lack of infrastructure has halted development of discovered assets. Offshore E&P activity in Arctic Canada has thus far been limited to seismic surveying and environmental assessment work. In 2011, the Canadian Arctic E&P market will therefore stand at a comparatively modest $154m. Investment will likely remain curtailed until 2014 when the first drilling activity is expected in the Canadian Beaufort. This will drive a CAGR of 35.2% from 2011-2016 as the added costs of exploratory drilling increase investment. By 2016 the Canadian Arctic E&P market will be worth $695m. After this time any significant growth will be related to investment in production facilities. However, with drilling commencing in 2014 at the earliest and a minimum of five years development time, it is unlikely oil and gas will be produced on a large scale in the Canadian Arctic before the forecast period is over.

The construction of the Mackenzie Gas project pipeline would also trigger major investment, however with a 5-7 year build time and a dismal gas price outlook, this is also unlikely to have any effect until the end of the forecast, if at all. Therefore Visiongain predicts in the report “The Arctic Oil & Gas Exploration & Production (E&P) Market 2011-2021” steady growth in the second half of the forecast period with a CAGR of 3.5% from 2016-2021. The focus will remain on seismic acquisition and exploratory drilling in the Beaufort Sea and the Arctic Island waters. By 2021, the Canadian Arctic E&P market will be worth $827m having grown at a CAGR of 18.3% from 2011-2021.

Report Details:

The Arctic Oil & Gas Exploration & Production (E&P) Market 2011-2021

Published: September 2011
Pages: 141
Price: US$ 2,664.00

Report Sample Abstract

Canadian Arctic E&P Projects

Canada has a long history of operating in Arctic conditions and an excellent understanding of the harsh and changeable environment. Canada also has extensive proven reserves of oil and gas in the Arctic as well as having a number of areas that are thought to hold considerable potential for new discoveries.

The Mackenzie Delta and Canadian Beaufort Sea area has proven large volume gas reserves discovered gradually over the last 40 years. There is an estimated 11.1tcf (316bcm) of discovered recoverable gas in the region and 250 million barrels of known recoverable oil. The USGS estimated there is a 95% probability of 3.6 billion barrels of oil and 28.5tcf (808bcm) of gas yet to be found in the Mackenzie Delta Province. The major inhibitor to development of these reserves has been the distance to market, and the proposed 1,200km (750mi) Mackenzie Gas Project pipeline connecting the Mackenzie Delta to the southern markets is estimated to cost $17bn. Regulatory delays and the current low price of natural gas on the US market due to the recent influx of shale gas has kept this project from being realised. In July 2011, Shell announced its exit from the project and that it was looking to sell its interests in the Mackenzie Delta, including the 1tcf (28.3bcm) Niglintgak field.

More information can be found in the report “The Arctic Oil & Gas Exploration & Production (E&P) Market 2011-2021” by Visiongain.

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