Oil sands are predominantly found in Canada and in small quantities throughout few regions of the United States. The Alberta province of Canada has more than 95 percent of the world's oil sands reserves. The total amount of bitumen is more than 1.6 trillion barrels, with over 178 billion barrels being accessible by using existing technology.
North American and Canadian oil sands reserves are providing opportunities for the oil companies and governments to find innovative and economic ways to extract and process oil sands. The majority of Canadian oil sands production needs to be exported to the United States for refining, creating two major issues for producers. One issue is identifying markets that have the process capacity to handle the very high volume of production. The other issue is that many of the accessible markets like petroleum administration for defense districts (PADD) II, III and IV may not be able to process anything but fully upgraded synthetic crude oil (SCO). This would significantly reduce netbacks for oil sands producers.
"In order to overcome these issues, oil sands producers are either purchasing refineries or are tailoring output to suit refineries, while some are entering into long-term agreements with refineries," observes Rajan. "Producers can also benefit by upgrading bitumen into high-quality SCO and introducing new blends such as diluted bitumen (Dilbit) and synthetic bitumen (Synbit) to meet refinery standards."
Imminent growth of the North American oil sands market is dependant on the number of participants and their active involvement toward the development of this promising energy reserve.
