Oil sands production jumped a surprising 14 per cent in 2009 despite unstable crude prices, economic turmoil and a broad pullback from the Fort McMurray region.
Last year, the Alberta oil sands pumped out 1.49 million barrels a day - or 544 million barrels for the year - of raw crude bitumen, according to a new annual report published by the province's Energy Resources Conservation Board over the weekend.
Although some companies were putting the brakes on oil sands projects in 2009 amid economic uncertainty - the Canadian Association of Petroleum Producers said capital expenditures fell to $10-billion compared with $18.1-billion in 2008 - production from players that established themselves in the region during the boom was largely credited for an increase in production.
Growing mine production from Suncor Energy Inc. and Canadian Natural Resources Ltd. was a key contributor to that increase.
And despite the downturn in recent quarters, the ERCB predicts the province's annual bitumen production will jump to 3.2 million barrels a day - or 1.2 billion barrels a year - by 2019. Over the same period, the board expects investment in the oil sands to total $148-billion.
Meanwhile, Alberta saw an 8.6-per-cent reduction in its conventional oil production last year compared with 2008. In 2009, the industry produced 461,300 barrels a day or 169 million barrels for the year.
Natural gas, which has fuelled much of Alberta's economy over the years but has suffered from depressed prices, continued its freefall.
Alberta produced four trillion cubic feet of conventional natural gas last year, which marked an 8.9-per-cent drop for 2008 production, according to the report. The ERCB forecasts that the number of new conventional gas wells will drop 26 per cent in 2010 to 2,800.
The regulator pegged Alberta's total remaining established bitumen and conventional oil reserves at 171.3 billion barrels.
The bulk is found in the oil sands where established bitumen is estimated at 169.9 billion barrels, while conventional oil reserves make up 1.4 billion barrels.
Darin Barter, a spokesman with the ERCB, said that with such an "enormous volume" in the province, exploration costs are now "zero."
"We know the oil is there, the bitumen is there, the technology may not be there, but we all know how quickly technology moves forward when there is a financial reward at the end," Mr. Barter said.
For the first time, the ERCB included the Grosmont deposit in northern Alberta, worth an estimated 406 billion barrels, in its data, which helped push up in-place bitumen by 28 per cent.
Although the deposit is not yet producing, the industry is working nearby and getting close to tapping it, according to the board.
"As projects come on stream, what it does is, it proves the resources," Mr. Barter said.
The board projects investment in conventional oil and gas extraction as well as unconventional non-oil sands, such as coal bed methane and heavy oil extraction, to ring in at $14-billion annually.