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Old 01-11-2016, 03:20 PM   #28
Frequitude
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Quote:
Originally Posted by polak View Post
Can any oil sands producer turn a profit at $31?
The important number is effective bitumen prices, because that is the commodity actually being produced by most Oil Sands producers.

WCS is the headline price for that, but you must remember that about 30% of a WCS barrel is just recycled high value diluent (i.e. not production). It's the 70% of the barrel that represents true economic value added.

WCS is currently hovering around C$26/bbl at Edmonton and Condensate (i.e. diluent) around C$49/bbl. Do the math and that nets to $16/bbl bitumen. Back out the pipe costs from Fort McMurray and you're probably looking around $14-$15.

So on a variable cash cost basis its pretty skinny for even the best of producers. For new investment it is nowhere close.
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