Investing In Canada

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Canadian Oil

Thursday, July 26, 2007

Canadian Oil

According to the Emergy Information Administration, Canada is one of the worlds largest produces and exporters of energy and has considerable natural resources; the country is a net exporter of oil, natural gas, coal, electricity, etc. Since 1980, Canada's total energy production has increased by 81%, while total energy consumption only increased by 40%. The majority of this excess capacity makes its way to the U.S. as Canada's largest trading partner. Consistently, Canada is the largest source for U.S. oil, natural gas, and electricity imports. This trend of energy export will only continue to rise as world energy demand increase.

Canadian Oil

As of January 2007, according to Oil and Gas Journal (OGJ), Canada reported 179.2 billion barrels of proven oil reserves; Saudi Arabia is the only country reporting more. The bulk of these reserves are oil sands deposits in Alberta where there are outstanding investment opportunities.

The oil sector is privatized in Canada and has undergone consolidation in recent years. There are a number of Key companies invested in this area: Imperial Oil (majority owned by Exxon Mobil), EnCana (Canada’s largest independent upstream operator), Talisman Energy, Suncor, EOG Resources, Husky Energy, and Apache Canada.

Oil Sands producers have also attracted increasing attention from Asian oil companies looking to satisfy growing demand in their countries. This has included major investments from Korean National Oil Corporation, China’s Sinopec and China National Offshore Oil Corporation.

With higher oil prices, it has become increasingly profitable to invest in oil sands projects and as a result these vast reserves are now being developed.

When I first started researching oil companies in Canada I contacted my investment advisor and he helped me focus my search to find companies that would fit my portfolio best. He also helped direct my search to other areas within the oil and gas industry in Canada including Offshore projects, Pipelines, Oil Services, and Refining.

Offshore Oil Projects

These are located off the Atlantic coastline and the major players are Petro-Canada, and Husky Energy. Industry experts also believe there could be sizable oil and natural gas deposits on the Pacific coast; however, there is currently a federal ban on offshore oil activities in the Pacific Ocean region.


There is an extensive pipeline system to transport western Canadian oil to domestic and U.S. markets. Canada has two major pipeline operators: Enbridge, and Kinder Morgan. Enbridge operates a 9000 mile network of pipelines and terminals delivering oil from Alberta to Eastern Canada and the U.S. Great Lakes region, while Kinder Morgan operates the Trans Mountain Pipe Line delivering oil from Alberta to refineries and terminals in Vancouver, British Columbia. These companies also operate extensive pipelines for export to the U.S. and there is demand for growth of these lines.

Anyone interested in investing in this industry should consult an investment professional. Here are some useful links to research on the companies discusses in this posting:

Apache Corporation
Encana Energy
EOG Resources
Husky Energy
Imperial Oil
Kinder Morgan
Talisman Energy

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