Athabasca Oil Sands is a producer of bitumen from the oil sands in the Athabasca region of northeastern Alberta. They are one of the largest bitumen lease holders in the region with a production potential of 500,000 to 800,000 barrels per day.
Athabasca Oil Sands fuels its growth through strategic acquisitions of oil sands resources. Improving technology and rising prices make projects that were once considered infeasible profitable.
Oil sands have been long attacked by environmentalists claiming that their mining accounts for 6.5% of Canada’s greenhouse gas emissions. The energy-intensive mining process releases vast volumes of carbon dioxide and sulphur dioxide into the atmosphere. Although environmental groups have attacked oil sands, Canada’s federal government seems to support the industry. They left oil sands information out of their environmental report and are looking to hire a PR firm to boost the image of the industry.
Increasing price of oil and natural gas, as well as the US insistence on weaning off Middle Eastern supply, is leading to a steep increase in demand for oil sands. Following demand, supply is also increasing as new technology allows oil companies to drill cheaply. With oil prices high, for example, Shell released in its annual report that its Canadian oil sands unit made an after tax profit of $21.75/barrel, double its worldwide profit of $12.51 per barrel on conventional crude oil.
Due to increasing prices and improving technology, projects that were not feasible are now profitable, increasing the number of competitors in the industry.