Canada slips to third in oil-reserves ranking
According to the latest BP Statistical Review of World Energy, Canada has fallen behind Venezuela in the oil-reserves ranking
CANADIANS like to think they have the second-largest oil reserves on Earth, after Saudi Arabia. But the country has slipped to third-place after Venezuela, according to the latest BP Statistical Review of World Energy, which assigns about 175 billion barrels of oil resources to Canada, including the oil sands, compared with Venezuela's 211 billion barrels, including Orinoco heavy oil.
Like Canada's Athabasca, Venezuela's Orinoco is an extra-heavy crude that needs specialised processing and refining before it can be refined in a conventional plant. Canada and Venezuela have increasingly become competitors to supply the US Gulf coast market.
Unlike Canada, Venezuela's reserves aren't subject to caveat; excluding oil sands, the BP lists Canada's proved reserves at 32 billion barrels, barely 2% of the world total.
Smoke and mirrors
But there may be more to the statistics than meets the eye. Ralph Glass, vice-president of operations with AJM Petroleum Consultants in Calgary, says the discrepancy can be attributed to a patchwork of reporting standards around the globe.
AJM is an independent engineering firm that performs audits of reserves for oil and gas companies. Reserve evaluations must adhere to standards set out by securities-exchange regulators in Canada and the US and tend to be more conservative than Opec figures, says Glass, which aren't independently verified. There is significant uncertainty over the reliability of Opec’s statistics, on which BP based its Venezuelan reserves estimate.
Venezuela's oil industry has been in a state of crisis since a general strike in 2002 led President Hugo Chavez to fire 17,000 employees at state-owned PdV. In 2006, Chavez ordered a nationalisation of oilfields that increased the government take to 60% from 40%.
Venezuela is one of the top-four crude suppliers to the US, but Chavez's frequent threats to cut off exports have prompted the world's largest oil consumer to seek more secure sources.
BP notes that Canada has managed to triple its proved reserves since 1990 and posted a 4% gain in oil production last year, to 3.3 million barrels a day (b/d) to make it the world's fourth-largest oil producer – well ahead of Venezuela's 2.4 million b/d, but behind China's 4.1 million b/d.