Reserves: 173 billion barrels.
The plan: To boost output to around four million barrels a day by 2020, and eventually to as much as eight million.
The challenge: Oil sands production is rising as high prices make the resource more economic. But the boom means there are not enough workers or materials to go around, forcing up wages and prices. Alberta's crude is mixed with sand, which makes production technically complex and more energy-intensive than conventional oil extraction. The oil is so heavy that it won't travel down a pipeline without being diluted or treated, so companies must spend money either processing the bitumen or adding diluent to make it more fluid. As awareness of the oil sands' environmental impact grows, regulators and the environmental lobby are running a fine tooth-comb over every new project application - creating more potential delays.
Technology: Steam must be injected into deep crude reservoirs to create mobility, a process called steam-assisted gravity drainage or SAG-D. Then, vast upgraders are needed to process the oil before it can be refined. New technologies, such as partial underground upgrading, horizontal combustion and innovative solvents, are being developed and could make extraction cheaper and easier.
Cost: Building an integrated oil sands project costs around $100,000 a flowing barrel. To produce a barrel of upgraded oil sands crude using SAGD costs more than $60 a barrel, in comparison to around $40 for a barrel of conventional Albertan crude (excluding royalties).
Companies: Almost every major publicly traded oil company in the world has some holdings in Alberta, including Royal Dutch Shell PLC, BP, Conoco, Total and Chevron. Canadian players include EnCana, Nexen, Canadian Natural and Husky Energy.
Result: Syncrude Canada - Canada's largest oil project - is still struggling to integrate the 100,000-b/d expansion it completed two years ago at a cost of $8.4-billion. New apparatus installed in the plant - intended to reduce the amount of sulphur in emissions - didn't work properly and released too much ammonia into the surrounding atmosphere. Since then, Syncrude has struggled to get to grips with the malfunctioning unit, resulting in millions of dollars in lost revenues.
U.S. Gulf of MexicoOutput: 1.2 million barrels of oil a day, eight billion cubic feet of gas a day.
Reserves: Estimates of how much crude the Gulf's ultradeep regions (over 1,200 metres), so far untapped by drillers, may hold range from three billion to 20 billion barrels of oil.
The Plan: Led by Chevron, BP and StatoilHydro, companies are beginning to look at bringing the ultradeep fields on stream; Chevron expects its Jack field to produce 60,000 barrels of oil a day by 2013.
The Challenge: Existing fields are aging, leading to production declines. Substantial damage to regional infrastructure by hurricanes Katrina and Rita also caused marked production declines. The ultradeep drilling required to bring the Jack field and others on stream is expensive, because the drill bit has to travel a large distance before hitting rock. It's also riskier; the deeper a company gets, the harder it is to get accurate geological findings that will tell it where to drill. So while the rewards are great, it's also easy to make an expensive mistake.
Technology: Many shallow water exploration and production techniques don't work in deep water because of the water pressure, as well as differences in geology and salt layering. New exploration methods, such as subsalt imaging, which unscrambles sound waves sent haywire by the salt layers, are being developed.
On the production side, companies are investigating ways to separate oil, gas and water in the wells themselves or on the sea floor, rather than doing that work on a floating production vessel, to prevent waste materials having to be pumped the long distance to the surface.
Cost of technology: The added depth adds to the cost. While it costs around $1-million (U.S.) a day to hire a rig to explore in shallow water, Chevron is spending about $1.6-million a day for a deep-water drill ship to work on its Tahiti prospect; it costs around $200-million to drill a single well in the area. Analysts estimate that to produce a barrel of crude from the ultradeep area would cost above $50 a barrel.
Companies: Many U.S. firms, including Chevron, Exxon, Conoco and Amerada Hess Corp., as well as foreign explorers like BP, Royal Dutch Shell and Total SA The example: Chevron's Jack prospect is expected to cost $3-billion to produce, but it's been hard for the company to find rigs capable of drilling at such great depths; there are fewer than 40 in the world, stalling crucial exploratory work.
In millions of barrels a day
|Alberta oil sands||1.3|
|U.S. Gulf of Mexico||1.2|
SOURCE: THE GLOBE AND MAIL RESEARCH