Some Economic Factors Regarding Petroleum Exploration and Production in Canada
Authors: Jensen R.D. 
Published: December 2007

American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc.

This paper was prepared for the 42nd Annual Fall Meeting of the Society of Petroleum Engineers of AIME, to be held in Houston, Tex., Oct. 1–4, 1967. Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor of the appropriate journal provided agreement to give proper credit is made.

Discussion of this paper is invited. Three copies of any discussion should be sent to the Society of Petroleum Engineers office. Such discussion may be presented at the above meeting and, with the paper, may be considered for publication in one of the two SPE magazines.

Western Canada's oil provinces offer both easy access and profitable opportunities. Investment and interest in this still expanding oil development indicates that American independent oil companies have little difficulty in extending operations into Canada. While not intended to provide detailed information, cost factors, economic conditions, taxation and business fundamentals are briefly outlined. Sufficient general information is provided to equip management with an overall familiarization of the area and the Canadian industry.

Introduction

Western Canada's Sedimentary Basin may well be one of the few remaining frontiers for oil and gas exploration which is within easy reach of all North American based oil companies. A review of the industry indicates that not less than 500 registered and fully active oil firms are operating in western Canada. Of these, approximately 275 are subsidiaries or extensions of American oil companies. Perhaps it is even more significant to note that over 35 fully bonafide American based independent oil operators have established branch offices or satellite operations in Western Canada during the past 18 months. While this fact does not in itself represent a measure of western Canada's potential, the increasing number of American independent companies active in the area offers strong testimony to the rapid development of its petroleum industry.

The existence of a sound economic climate and favourable geological environment working in harmony with prudent judgment has resulted in unqualified success for many operators. Much of this success has been enjoyed by American independents who have taken the trouble to look into the Canadian scene and become familiar with its complexities and differences. While Western Canada and its petroleum industry is far too broad and complex a subject to embody into one brief outline, it is intended that this discourse will generate an interest in the area and stimulate further study. It is also hoped that the following will provide an understanding of factors which have contributed to its rapid development and represents a preliminary study with sufficient data for a brief familiarization of the ground rules.

AREA AND RESERVES

First a look at the environment and record of achievement - The area in question represents some 800,000 square miles and covers much of Alberta, Saskatchewan, parts of Manitoba, British Columbia and the Northwest Territories.