Global oil demand is rising, while global supplies are shrinking. This is a known fact. The current oil price can certainly back up that statement. Consensus also agrees that we will never see oil at $25.00 again. The logical conclusion of our above statement is that oil reserves should be a good long-term investment. However, the location of oil companies’ reserves can affect their profits and valuations.
Some of the largest reserves in the world are found in Venezuela, Saudi Arabia, Russia and Canada. Political turmoil in Venezuela, an unstable and unpredictable government in Russia, and Osama bin Laden targeting Saudi Arabia leave Canada, namely the Alberta oil sands, with the world’s largest and most reliable oil reserves.
Companies such as Exxon Mobil Corp., Royal Dutch/Shell Group and Canadian Natural Resources Ltd. plan to spend billions over the next 10 years to develop unusual oil fields in Alberta as demand for crude rises and production from existing reserves declines . Oil sands production in Alberta could double to 2 million barrels per day by 2013, according to a presentation by Enbridge Inc. earlier this month. Oil sands are deposits of bitumen, a heavy oil that must be processed to turn it into crude oil for use in refineries to make gasoline and diesel fuel. The US Department of Energy has revised its estimates of global oil resources to include 174 billion barrels of proven reserves in the oil sands that can be recovered using current technology.
Due to the growing demand for oil and other goods from China and India due to the growth of their economies, strong trade relations are established with Canada – a country with many resources, political stability and neutral military views.
Alberta oil sands companies look like a great investment for the next decade
There are many companies with oil sands reserves, here are a few that are wide open.
Suncor Energy Inc. SU.tse, Western Oil Sands Inc. WTO.tse and Canadian Oil Sands Fund COS/UN.tse