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outlook crude oil estimated 2035

outlook crude oil estimated 2035

There are other sources of crude oil that could be developed preferentially over heavy crude. These include shale oil, which is rapidly increasing production in North America, the low-cost resources in Iraq and Brazilian pre-salt discoveries. Because costs are so important, this outlook presents cost data in detail for Canadian oil Sands and for the Orinoco Belt in Venezuela, the two most important sources of incremental non-conventional heavy crude production. Costs were also compiled for shale oil, Brazilian pre-salt developments, and Middle Eastern heavy and mediumheavy oil developments which are representative of the costs in the region.

Country     Projects     Initial Investment (US$ Million)     Initial Reserves (Million Barrels) $ per barrel

Canada     Oil Sands Average     3,731     578     8.10
Venezuela     Orinoco Belt Average     14,932     1,207     14.94
Congo     Tchikatanga-Makolas     4,290     150     28.60
United States     Nikaitchuq Offshore Alaska     2,000     220     9.09
U.K. North Sea     Mariner and Bressay     10,700     600     17.83
Iran     South Azadegan     2,000     1,640     1.22
Saudi Arabia     Manifa     11,000     10,000     1.10
Brazil     Papa Terra     5,200     380     13.68
Brazil     Pre-Salt     250,000     14,300     17.48
United States     Shale Oil Wells Average     7.61     0.525     14.49
Source: Hart Energy complied from operating company information

The initial investment, estimated reserves and the cost in US$ per barrel of reserves are tabulated for selected projects in Table I.1. The first three are non-conventional bitumen and extra-heavy crude developments; for the Canadian and Venezuelan projects, the costs are the average of the projects analyzed in this report. The next six are conventional heavy oil projects by definition but, with the exception of the two Middle Eastern projects, are located offshore in deep water or in harsh environments. The last two are light oil. The Brazilian pre-salt reservoirs are located in over 7,000 feet of water and another 16,000 to 17,000 feet below the seabed. Shale oil is a non-conventional source that is rapidly increasing supplies in North America. Such resources are located in every region of the world and appear to be cost competitive with other non-conventional sources.

As Table I.1 indicates, non-conventional extra-heavy oil and bitumen in Venezuela and Canada are no more costly than pre-salt oil and shale oil. The project in Congo is more costly because of the remote location and lack of infrastructure. The offshore conventional heavy oil developments in the North Sea and Brazil cost more but are still competitive. Thus, cost alone will not defer heavy oil development. Other factors such as external energy and water use, with the associated environmental impacts, could serve to deter investment in heavy oil in some parts of the world. However, the primary factor in whether heavy oil is developed at the pace suggested in the longterm outlook of this report will depend on how fast oil demand continues to grow, the oil price and how fast new light oil sources, such as Iraq and the Brazilian pre-salt developments, come online.

The volume of heavy oil entering the export market increases to 4.5 million b/d by 2015 and declines thereafter in the short- and medium-term project scenario as more producing countries increase heavy oil processing capacity. The heavy crude on the export market decreases to 4.3 million b/d by 2020 and 3.3 million b/d by 2030. In the long-term scenario, heavy crude entering the export market continues to increase, despite growing domestic processing capacity in producing countries, reaching 6.0 million b/d by 2025 and remaining at approximately that level through 2035.

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