Update on the

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Update on the Oil Sands Industry March
2005 The Athabasca Regional Issues Working
Group Association 9909 Franklin Ave. Fort
McMurray, AB [phone] Mike.glennon_at_woodbuffa
lo.ab.ca www.oilsands.cc
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Index

• Role of RIWG
• Growth in the oil sands industry
• Capital scenario
• Production scenario
• Population
• Jobs
• Issues and actions

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The Regional Issues Working Group

• Our vision
• To provide a proactive process that promotes the
  responsible, sustainable development of resources
  within the Regional Municipality of Wood Buffalo
  for the benefit of all stakeholders
• What we do
• Facilitate planning for growth
• Facilitate effective and efficient resolution of
  issues
• Involve all of the resource developers and
  affected stakeholders in planning
• Develop plans for sharing benefits with
  Aboriginal stakeholders

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Seven Oil Sands Projects Under Construction in
2005
Other projects Dover to Deerland transmission
line
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Status of Projects in the Municipality of Wood
Buffalo January 2005
PROJECTS APPROVED Opti-Nexen Long Lake
Syncrude Stages 3 - 5 ConocoPhillips
Surmont Suncor Firebag 3 4, MCU CNRL
Horizon Orion Whitesands
Pilot Shell Jackpine Deer Creek
Joslyn Ph. 2 Petro-Canada Meadow Creek
Fort Hills Energy Fort Hills PROJECTS UNDER
AEUB APPLICATION Albian Sands Phase 2
Devon Jackfish CNRL Cogen
Husky Sunrise MEG Energy Christina Lake
Pilot PROJECTS UNDER PUBLIC DISCLOSURE/ANNOUNCED
Suncor Voyageur Petro-Canada
Lewis Synenco Northern Lights
Enbridge Pipeline JACOS Hangingstone
Imperial Oil Kearl Mine Connacher Great
Divide Terasen Pipelines Bison
Pipeline
MEG Energy Christina Lk.
Comm.
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Annual oil sands capital expenditures32B over
the next decade - 28B in the Athabasca region
2003 Forecast
Mid-line Case Conservative Estimate May 2004
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North American Oil Reserves Remaining as of
December 31, 2001
Reference (EUB) (CAPP) (IPE) (US DOE)
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Oil Sands From 350,000 bbl/day in 1990 to over
2,000,0000 bbls/day in 2011 Growing to over 68
of Canadian oil production
Canadian Oil Production - Discounted Case
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Upgraded
Thousands of barrels per day
Oil Sands
Bitumen
Conventional Heavy
Conventional
Conventional Light/Medium and Pentanes Plus
Source 1990 to 2002 CAPP plus
forecast of Conventional and heavy
2003 to 2011 Oil Sands Forecast RIWG June 2004
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Oil Sands Production Forecast 1 million bbl/day
in 20042 million bbl/day by 2010
2003 Forecast
Mid-line case conservative estimate
Based on regional production from
Athabasca/Cold Lake/Peace River
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Oil Sands Expenditures2002 and 2003

Spent in Edmonton area 2.02 B
2.0 B
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Industrys capital investment generates
significant socio-economic benefits
Personal Income Tax
Total
Total
Total
Total
2003 Forecast
AB Corporate Tax
Royalty
Royalty Payments
Royalty Payments
AB Corporate Tax
AB Corporate Tax
AB Corporate Tax
Royalty Payments
Personal Income Tax
Personal Income Tax
Personal Income Tax
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Oil Sands Delivered

• National Oil Sands Task Force predictions
• Initial 1994 forecast - 5.7 billion in new
• capital projects over 25 years
• 1996 forecast - 21 billion over 25 years

• Actual spending to date (1996 2003)
• 28 billion over the past 8 years!
• Estimated 2004 spending - 6.1 billion
• 32 billion over the next 10 years

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Oil Sands DevelopmentRisk Areas
Regulatory/ Stakeholder Support
Market Access Value
Science Technology/ RD
Regional Infrastructure
Investment Climate/ Fiscal Terms
Environmental Requirements
Risks
Skilled Trades
Commodity Prices
Production/ Reliability
Financial Market Support
Capital Costs
Operating Costs
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Fort McMurray Population Forecast
2004 Census 56,000
Data Source RIWG Nichols Applied Management
May 2004
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Oil Sands Forecast of New Permanent Operations
Jobs
2003 Forecast
Number of Jobs
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Key Municipal Issues

• Community infrastructure address funding
  shortfalls for needed infrastructure
• Land availability - continue with accelerate
  release of land
• Municipal infrastructure for servicing land
  capital pool for funding of deep services
• Highway Infrastructure continue advance
  planning and accelerate work on current five year
  priority list
• Health Authority funding increase to address
  shadow population and rapid growth

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Key Issues

• Skilled trades/professionals work with
  regulators to expedite the permit process
• - apprenticeship/aboriginal training must
  continue
• Co-generation outlook continue building lines
  for export capacity
• Regulatory approval uncertainty longer time
  frames and higher costs
• R D technology continue support

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Disclaimer
This presentation contains forward-looking
information on future production, project
start-ups and future capital spending. Actual
results could differ materially due to market
conditions, changes in law or government policy,
changes in operating conditions and costs,
changes in project schedules, operating
performance, demand for oil and gas, commercial
negotiations or other technical and economic
factors.