Economic Outlook for Canada’s Energy

Sector

Terry AbelDirector, Oil Sands

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Canadian Energy Supply Chain ForumOctober 2014

• Represents large and small producer member companies. • Members explore for, develop and produce natural gas,

natural gas liquids, crude oil, and oil sands throughout Canada.

• Produce about 90 per cent of Canada’s natural gas and crude oil.

• Part of a national industry with revenues of about $110 billion per year.

• Associate members provide a wide range of services that support the upstream crude oil and natural gas industry.

Canadian Association of Petroleum Producers

• Global energy demand will continue to grow.§ Population increases.§ Higher standard of living.

• Continued reliance on hydrocarbon resources despite growth in renewables.§ 82% in 2011; 78% is

forecast for 2035.

• Shift to unconventional sources of oil and gas.

Global Energy Demand Growth

Growth in Canadian Energy Production

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Factors Impacting Growth – Crude Oil Prices

Factors Impacting Growth – Transportation

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Annual Revenues ($ Billions)Major Canadian Products Industries

Source: ARC Financial & CAPP

• Payments to governments average about $18 billion per year.• 20% of the value of the Toronto Stock Exchange.• Approximately 20% of Canada’s exports.• Employs more than 550,000 in Canada (direct & indirect).• Invested $74 billion in Canada in 2013.§ Largest private sector investor in Canada.

Canada’s Energy Industry and the Economy

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Oil sands

Conventional

Shifting Energy Investment

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Oil Sands Share ofCapital Investment

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Note: Excludes spending on mergers & acquisitions

Western Canada2013 2014E 2015F$39 $36 $35

Western Canada2013 2014E 2015F$39 $36 $35

East Coast Offshore2013 2014E 2015F$3.9 $3.5 $3.5

East Coast Offshore2013 2014E 2015F$3.9 $3.5 $3.5

Total Energy Investment2013 2014E 2015F $74 $73 $69

Total Energy Investment2013 2014E 2015F $74 $73 $69Northern Canada

2013 2014E 2015F$0.1 $0.7 $0.5

Northern Canada2013 2014E 2015F$0.1 $0.7 $0.5

Oil Sands2013 2014E 2015F$31 $33 $30

Oil Sands2013 2014E 2015F$31 $33 $30

2015 Energy Investment Spending (Cdn $Billions)

Diversity of Supply Chain

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Suppliers to Canada’s Oil Sands (# of Companies by Region)

Aboriginal Business With Oil Sands Developers

•Athabasca Region Aboriginal Businesses:§ Revenues of $1.9B in 2013. § $10B in revenues over last 15 years.

•Employment:§ Over 1,700 aboriginal employees in permanent jobs.

Diversity of Supply Chain

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