The unnoticed booming oil economy !

Can you guess which is the country with the worlds second largest reserve of Oil ?

If you had said a Gulf country or Russia or Venezuella you got it wrong!

It Is CANADA!

Saudi Arabia with 260 billion barrels as reserves produces about 8.8 million barrels a day having a total reserve life of about 81 years compared to Canada which has a reserve of 179 billion barrels a day and produces 2.7 million barrels of Oil a day with a reserve life of about 182 years.


Including the portion of oil sands reserves considered by government regulators to be producible at current prices using current technology, Canada's proven oil reserves were estimated at 179 billion barrels (28×109 m3) as of 2007, placing it second only to Saudi Arabia. Over 95% of these reserves are in the oil sands deposits in the province of Alberta. Although Alberta contains nearly all of Canada's oil sands and about 75% of its conventional oil reserves, several other provinces and territories, especially Saskatchewan and offshore Newfoundland, have substantial oil production and reserves. Total Canadian oil production was about 1.2 billion barrels (190×106 m3) in 2006, giving Canada about 182 years of reserves at current production rates.

Over 99% of Canadian oil exports are sent to the United States, making Canada, not Saudi Arabia, the United States' largest supplier of oil.The picture is complicated somewhat by the fact that Canada has a highly sophisticated energy industry and is both an importer and exporter of oil and refined products. In 2006, in addition to producing 1.2 billion barrels (190×106 m3), Canada imported 440 million barrels (70×106 m3), consumed 800 million barrels (130×106 m3) itself, and exported 840 million barrels (134×106 m3) to the U.S. The excess of exports over imports was 400 million barrels (64×106 m3).

The addition of 174 billion barrels (28×109 m3) of the vast Alberta oil sands deposits, mostly in the Athabasca Oil Sands, to proven reserves by the Alberta Energy and Utilities Board (AEUB), was controversial at the time because oil sands contain a semisolid form of oil referred to as bitumen by Canadian government authorities, rather than conventional crude oil.
The existence of the deposits (historically referred to as "tar sands") has been known for centuries since major rivers cut through the sands to reveal the bitumen in the river banks, but their development had to wait for high prices and the invention of new technology. In recent years technological breakthroughs have overcome the challenges of producing it and most Alberta oil is now non-conventional production from oil sands rather than conventional oil fields. The AEUB estimates that by 2016 Alberta oil sands production will triple to amount to 86% of the province's total oil production, and Alberta will by then be one of the largest oil producers in the world.

The difference between crude bitumen and crude oil is somewhat arbitrary since bitumen is really just an unusually thick and viscous grade of crude oil, and many U.S. oil refineries have been modified to handle it in recent years as domestic U.S. oil production declines. The main problem is that it must be heated or diluted with solvents before it will flow through pipelines.

A problem for companies trading on U.S. stock markets is that U.S. Securities and Exchange Commission (SEC) rules do not allow them to report oil sands production as an oil and gas activity, so they cannot report their oil sands reserves as oil reserves. Companies such as Petro-Canada with large oil-sands operations claim this can seriously underestimate the value of their assets. As of 2008 the SEC was reported to be looking at putting oil sands reserves on the same footing as conventional crude oil.


The West(and our very own Finance Minister PC) has been pressurising OPEC to raise its production , Why is it that the US or other western countries not pressurize canada to increase its production? Is it because Canada has the worlds largest undefended border with the United States or is this typical western hypocrisy?

A market maker friend of mine who trades the fx markets , believes that there is a very high degree of correlation between Crude Oil Contract and the Canadian Dollar contract (CAD).And by tracking the crude oil contract one can do good intraday(especially on wednesdays/EIA data release days) as well as long term trades on the CAD, for the long term play on structural crude oil bull market,Buy the Canadian Dollar he says!

Due to the price boom in crude oil, the Canadian economy is a direct benefactor and would be witnessing a huge boom and an exponential expansion of its own economy, thus indirectly benefiting the U.S,experts go on to say that , the energy crisis induced soft landing in the US might end up being rescued by the Kind Act of Canada afterall!


Cartoon thanks to the Sheer Brilliance of John Trever,Albuquerque, E-mail John ©John Trever and the Albuquerque Journal. .