Morice Land and Resource Management Plan
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- Location Analysis
- Market Analysis
- Market Demand and Price Trend
Opportunity AnalysisWith the increased natural gas demand domestically and for the export market, the Ministry of Energy and Mines (MEM) has showed increased interest in resource development outside of the northeast region of the province. Offshore oil and gas potential in the Queen Charlotte Basin and coalbed methane production in several large interior basins has been studied by MEM. The southern portion of the Bowser Basin and the Sustut Trough lie within the Morice LRMP area. The Bower Basin is extremely large geographical area extending from approximately Telkwa in the south connecting to the Whitehorse Trough and extending upwards to the Yukon. The attached map below outlines the oil and gas fields throughout British Columbia.
Location AnalysisThe following development issues are important for gauging the extent of the oil and gas industry in the region:
Market AnalysisCurrent Production TrendsProven Oil Reserves - In 2001, proven reserves in North American (USA, Canada, and Mexico) represented only 4.8 percent of the total reserves. As illustrated in Figure 15. These reserves have been declining for the past twenty years. However, the story is very different between countries. In Mexico, with the largest North American reserves, there has been a sharp decline since 1991, while Canada and the US have shown only small declines in reserves. Meanwhile world reserves have been increasing over the past twenty years. Growth in the world oil reserve has been lead by the noticeable increase in the Middle East, which in 2002 represented 65.4 percent of the worlds proven reserves. Figure 15. World Oil Proven Reserves (1982 to 2002)
Source: BP Statistics Review of World Energy. Proven Gas Reserves – Overall, proven natural gas reserves have been declining in North America in recent years with only the United States managing to increase reserve levels since 1992. In 2002, North America made up 4.2 percent of world proven reserves. Natural gas is typically transported by pipeline to consumers so the global supply is not as important as it is for oil; however, elsewhere in the world there has been a sizeable and steady increase in proven reserves, particularly in the Middle East. Figure 16 highlights North American and world gas reserves. Figure 16. World Gas Proven Reserves (1982 to 2002)
Source: BP Statistics Review of World Energy. Oil Production - While North America has a small amount of the world’s proven oil reserves; it is a much larger player when it comes to the current world production levels. In 2002, North America represented 18.7 percent of world production with approximately half of the North American total coming from the United States. Over the past ten years the production from the United States has been declining while production in Mexico and Canada has been increasing. For the rest of the world, there has been a general increase in world production in the last ten years. The most noticeable increase has been the rapid rise in Europe and Eurasia since 1996. This increase is primarily driven by sharp increases in production from the Russian Federation. Figure 17 highlights the world oil production focusing on activities in North America. Figure 17. World Oil Production (1992 to 2002)
Source: BP Statistics Review of World Energy. Gas Production – In North America, the United States made up 71.4 percent of North American production and 21.7 percent of the world’s natural gas production in 2002. Canada, which reached natural gas production of 165.2 million tonnes oil equivalent in 2002, makes up 23.9 percent of the remaining North American share. Overall, North American natural gas production has grown a modest 14.6 percent in the last ten years. Meanwhile, Canadian production has climbed 43.5 percent in the same period. Elsewhere in the world natural gas production from Asia and the Middle East has jumped sharply to lead over all world production noticeably higher. Figure 18 illustrates the gas production levels in North America and elsewhere in the world between 1992 and 2002. Figure 18. World Natural Gas Production (1992 to 2002)
Source: BP Statistics Review of World Energy. As expected, the United States is the largest destination of the oil and gas that is export by Canada. In 2002, the United States received 98 percent of all oil and almost 100 percent of gas exported from Canada. Market Demand and Price TrendOil Demand and Prices - Oil prices have been strong over the past twelve months. Concerns of Middle East supply disruption around the war in Iraq have priced in a “war premium” in recent months. However, world oil prices are influenced by more than typical supply and demand factors with the influence OPEC’s oligopolistic pricing and production behaviour having a noticeable influence on world pricing. As well consumer inventories also play a roll in pricing consideration. This has been primarily driven by consumer inventors and import requirements for the US and other major industrial nations. In 2001, net imports of oil accounted for 55 percent of all US oil consumption; this is up from only 37 percent in 1980. Over the longer term prices are anticipated to drop back from current levels of over $30 a barrel. However, the price will remain firm with the 2020 price of oil anticipated to be $25.50 (measured in constant terms). Natural Gas – Natural gas prices are more dependent on local factors and supply demand factors. Given these local factors and that natural gas moves around the world like oil, prices in North America are noticeable below those in Europe. In North America, natural gas prices tumbled 15 percent on average in July, as cooler-than-normal summer weather across much of North American dampened demand. However, overall natural gas prices remain about 60 percent higher than a year ago. Prices are expected to remain at these levels for the next couple years and will be influenced by changes in supply and demand from within the North American market. Even looking out to 2020, natural prices are anticipated to remain at price levels currently experienced or slightly below (in real dollar terms). Table 19 outlines the change for oil and gas over the past several years and the anticipated price for 2003 and 2004. Table 19. Commodity Prices for Oil and Gas
Source: Commodities Price Report and BP Statistics. Download 1.06 Mb. Share with your friends:
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