Primary Author: Mr Gagandeep S Issar
Co-Author(s): Mr Azim Aminzadah BComm
Audience Focus: Intermediate
Application Type: Research Venue: 2015 AACE International Annual Meeting, Las Vegas, NV, USA
Abstract: Canadian Oil Sands industry has been at the crossroads. While Canada’s rich natural resource endowments have provided an unparalleled economic opportunity, an array of policies, lack of strategy on part of government and businesses in developing these resources leave the companies ill-equipped to respond to a rapidly changing competitive environment. Project planning in Canadian Oil Sands industry in general has been very cyclical with no secondary paths of load bearing. Coupled with unprecedented turmoil in the financial markets in recent years, there has been a fundamental restructuring of the industry.
Although Canada has a vast Oil Sands reserve base, relevant technical and financial resources, which enable successful completion of projects, two things stand-out in the financials of any Canadian Oil Sands company:
- Higher operating and capital expenditure (CAPEX) per barrel of Synthetic Crude Oil (SCO)
- Lower realized selling price of SCO
This paper seeks to examine and address three fundamental questions:
- How ‘Tragedy of Commons’ has led to volatile project development
- Impact of environmental and regulatory issues on new projects
- How to manage major CAPEX for gaining competitive advantage
Co-Author(s): Mr Azim Aminzadah BComm
Audience Focus: Intermediate
Application Type: Research Venue: 2015 AACE International Annual Meeting, Las Vegas, NV, USA
Abstract: Canadian Oil Sands industry has been at the crossroads. While Canada’s rich natural resource endowments have provided an unparalleled economic opportunity, an array of policies, lack of strategy on part of government and businesses in developing these resources leave the companies ill-equipped to respond to a rapidly changing competitive environment. Project planning in Canadian Oil Sands industry in general has been very cyclical with no secondary paths of load bearing. Coupled with unprecedented turmoil in the financial markets in recent years, there has been a fundamental restructuring of the industry.
Although Canada has a vast Oil Sands reserve base, relevant technical and financial resources, which enable successful completion of projects, two things stand-out in the financials of any Canadian Oil Sands company:
- Higher operating and capital expenditure (CAPEX) per barrel of Synthetic Crude Oil (SCO)
- Lower realized selling price of SCO
This paper seeks to examine and address three fundamental questions:
- How ‘Tragedy of Commons’ has led to volatile project development
- Impact of environmental and regulatory issues on new projects
- How to manage major CAPEX for gaining competitive advantage