(Adds Cenovus comment)
By Nia Williams
CALGARY, Alberta Feb 21 ConocoPhillips
has revised down over a billion barrels of oil sands reserves
because of low global crude prices, a company filing showed on
Tuesday, the latest sign that some of Canada's vast hydrocarbon
potential may be left untapped.
The U.S. oil major said developed and undeveloped reserves
of bitumen - the heavy viscous oil found in northern Alberta's
remote oil sands - totalled 1.2 billion barrels at the end of
2016, down from 2.4 billion barrels at the end of 2015.
The oil sands have some of the highest full-cycle breakeven
costs in the world, with new thermal projects needing U.S. crude
prices around $60 a barrel. Crude futures settled at
$54.33 a barrel on Tuesday.
The U.S. Securities Exchange Commission (SEC) document
provides a detailed breakdown of the global reserves cut Conoco
announced in quarterly results in early February, when it
debooked 1.75 billion barrels of oil equivalent of reserves.
Al Hirshberg, Conoco's executive vice president for
production, drilling and projects, told investors on the
quarterly call the company expects to rebook the reserves if
current prices hold.
Likewise Martin King, an analyst with GMP FirstEnergy in
Calgary, said the debooking likely had more to do with SEC rules
requiring companies to evaluate economic reserves at year-end.
But the fact that the oil sands make up 70 percent of the
reduction underlines how much of Canada's resources are
uneconomic in a weaker oil environment.
"They (the oil sands) are at the upper end of the cost
curve," said Judith Dwarkin, chief economist at RS Energy Group
in Calgary. "It may or may not speak to future similar events
from other producers."
Calgary-based Imperial Oil Ltd, which is
majority-owned by Exxon Mobil Corp, debooked 2.6 billion
barrels of reserves in January.
ConocoPhillips made the reserve reductions at the Surmont,
Foster Creek, Christina Lake and Narrow Lakes projects.
Surmont is operated by ConocoPhillips and a joint venture
with Total E&P Canada, a unit of Total SA, and the
other three are joint ventures run by Cenovus Energy Inc
Total also debooked undeveloped reserves at Surmont,
according to SEC filings. But Cenovus, which reports to Canadian
securities authorities, said its total proved reserves including
non-oil sands operations rose 5 percent in 2016 versus a year
Cenovus spokesman Reg Curren said the company assumed
different rules relating to reserves reporting in Canada and the
United States were behind the difference.
(Reporting by Nia Williams; Editing by James Dalgleish and Lisa