World Energy Outlook 2006

and the projected growth of heavy non-conventional oil output. These trends,
together with increasing demand for lighter oil products and increasing fuelquality
standards, is expected to increase the need for investment in upgrading
facilities in refineries.
Production from Non-Conventional Resources
Production of non-conventional oil, mainly in non-OPEC countries, is
expected to contribute almost 8% to global oil supplies by 2030 – up from less
than 2% now. Output jumps from 1.6 mb/d to 9 mb/d. The bulk of this
increase comes from oil sands in Canada. 10 Gas-to-liquids plants also make a
small but growing contribution to non-conventional oil supplies, rising from
0.1 mb/d in 2005 to 0.3 mb/d in 2015 and 2.3 mb/d in 2030. Coal-to-liquids
production is projected to reach 750 kb/d in 2030, with most of this output
coming from China, where low-cost coal supplies are abundant (see Chapter 5).
Several countries have significant oil-shale resources, though they are not
expected to make a significant contribution to global oil supply before 2030.
Canadian non-conventional oil production is centred in the province of
Alberta. The province contains an estimated 315 billion barrels of ultimately
recoverable crude bitumen resources, with proven reserves of 174 billion barrels
at year-end 2005 (NEB, 2006). Alberta produces diluted bitumen and
upgraded crude, most of which is exported to the United States. In both cases,
the primary hydrocarbon content, known as natural bitumen, is extracted from
oil-sand deposits. This bitumen is then diluted with lighter hydrocarbons and
transported to a refinery or upgraded on site into a high-quality synthetic crude
oil, which can be refined in the normal way. In 2005, Canadian production of
non-conventional oil totalled 1 mb/d. Output is projected to triple by 2015
and climb further to close to 5 mb/d by 2030.
There are currently 12 oil-sands projects under construction and another
38 proposed projects in Alberta. Investment of almost $80 billion is planned for
the next 10 years. Some 36 of these projects involve mining or drilling while the
rest are new or expanded projects involving upgrading facilities. Of the drilling
projects, 45% are in situ steam-assisted gravity drainage – a process that involves
the injection of steam into the oil-sands deposits to allow the bitumen to flow to
well bores and then to the surface (Table 3.3). Our projections take account of the
availability and cost of natural gas – the primary energy input to in situ oil-sands
production. The majority of the new production is expected to be of the higherquality
upgraded crude. Many new players have entered the oil-sands industry,
including several international oil and gas companies and foreign national oil
companies. In the Reference Scenario, capital expenditure averages about
$6.8 billion per year over the projection period.
10. Most of the production of extra-heavy bituminous crude oil in Venezuela is now classified as
conventional oil.
Chapter 3 - Oil Market Outlook
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© OECD/IEA, 2007
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