Canada’s Energy in a Global & Local

Context

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

EnergySecurity

Markets

Environment Social

Looking Forward toContinuing Responsible Growth

3

Global Primary Energy Demand

• Population growth

• Standard of living

Energy Demand Growth

• Ongoing high reliance on hydrocarbons

• Increasing role for renewables

• Shift to non-conv. oil & natural gas

All Forms of Energy,

Developed Responsibly

• Production

• Cost competitiveness

• Environmental performance

Technology -Key Lever

for Sustainable

Growth

Source: International Energy Agency – New Policies Scenario

World Energy Outlook 20110

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

2010 2015 2020 2025 2030 2035

million tonnes oil equivalent

Other RenewablesBioenergyHydroNuclearNatural GasOilCoal

Source: International Energy Agency World Energy Outlook 2012

Ongoing reliance on fossil fuels (share of energy consumption):2010: 81% 2035: 75%

Global Crude Oil Reserves by Country

26 25 2130

3748

8092

102

141155

173

265

298

0

50

100

150

200

250

300

Venezu

ela

Saudi Ara

bia

Canada

Iran

Iraq

Kuw

ait

Abu D

habi

Russ

ia

Libya

Nig

eria

Kazh

akhst

an

Chin

a

Qata

r

United S

tate

s

bill

ion b

arr

els

Source: Oil & Gas Journal Dec. 2012

Restricted

(81%)

Open to

Private

Sector

Oil Sands

56%

Other

44%

World Oil ReservesOpen to

Private Sector

© 2014 IHS

Canada has one of the most stable investment climate amongst other major global reserve holders

6

IHS Country Risk Analysis provides a comprehensive picture of the quality of conditions and level of stability in over 205 countries around the world. The overall Country Risk

Ratings aggregate six component ratings—Political (25%), Economic (25%), Legal (15%), Tax (15%), Operational (10%), and Security (10%). The principal quality these ratings are

measuring is stability.

Source: IHS Country Risk, Q2 2014, and US EIA

Negligible

Low

Moderate

Medium

Significant

High

Very High

Insignificant

Country risk of nations that contain 90% global reserves (billions of barrels)

© 2014 IHS

Industry Capital Spending Cdn $billions

Note: Excludes spending on mergers & acquisitions

Western Canada2012 2013E 2014E $37 $39 $38

East Coast Offshore2012 2013E 2014E$2.4 $3.0 $3.5

Oil & Gas Investment Spending:

2012: $67 billion

2013: $69 billion (estimate)

2014: $71 billion (estimate)

7

Northern Canada2012 2013E 2014E$0.1 $0.5 $0.7

Oil Sands2012 2013E 2014E$27 $27 $29

● Industry will invest $71 billion in Canada in 2014

Largest single private sector investor in Canada

● Payments to governments average about $18 billion per year

● Oil and gas accounts for 20% of value on Toronto Stock Exchange

● Oil and Gas accounts for close to 19% of exports

● Industry employs more than 550,000 in Canada (direct & indirect).

The Oil and Natural Gas IndustryA Key Driving Force in the Canadian Economy

Upstream Oil& Gas

AutoManufacturing

Forestry& Logging

Wheat &Barley Uranium

8

Source: Cenovus

Oil Sands

Canadian Production - Oil Sands (Bitumen & SCO) & Conventional

Access to Markets – Pipeline Expansions in Development

Rail Cycle Times and Estimated Cost to Market*

*All rates are estimates only. Actual rates could vary depending on the density of the crude which limits the volume per carload; weather and logistical factors could increase cycle times. Trucking costs vary depending on the density of the crude and distance from loading/unloading terminal.

Data source: Keystone XL Final Supplemental Environmental Impact Statement

Canadian Pipeline Capacity vs 2014 Supply Forecast

Enbridge Mainline

Trans MountainExpress

PADD IV

Transportation Safety

● Crude oil on water Prevention, response,

recovery, liability coverage

● Rail Safety Tank car standards and

transition

Emergency response

Liability coverage

● Pipeline integrity CEPA’s Integrity First

Principles

99.999% safe delivery

15

Environmental Performance

Global Emissions

GHG emissions from oil sands: Accounted for 0.14% of global GHG

emissions

8.7% of Canada’s GHG emissions

28% reduction in intensity from 1990

Global CO2 Emissions Canada’s 2%

Sources:

1. United Nations Statistics Division (2010 Data)

2. Environment Canada (2012 Data)

Note: Global split based on CO2 emissions, Canada’s split based on

GHG emissions

USA

18 %

Europe a n Union

12 %

Othe r

2 6 %

China

2 6 %

Russia n

Fe de ra tion

5 %

Austra lia /Ne w

Ze a la nd

1%

India

6 %

Ja pa n

4 %

Ca na da

2 %

Other Oil & Gas

3%Electricity

12%

Other Upstream

13%

Emission Intensive

& Trade Exposed

Industries

11%

Agriculture

10%

Transportation

24%

Oil Sands

8.7%

Waste & Others

7%

Buildings

11%

North American Emissions (2012)for Coal-fired Power and Oil Sands

0 - 20 metric tons

20+ - 40 metric tons

40+ - 80 metric tons

Legend

U.S. Coal fired power

generating plants (CO2)

Canadian coal-fired power

generating plants (GHG)

Canadian oil sands (GHG)

Sources: U.S. DOE/EIA & Environment Canada

MI

MO

NE

NM

ND

CO

SC

KS

TN

MN

UT

OK

WI

AZ

AR

NV

OR

SD

NY

NH

MS

ID

LA

MA

MD

ME

NC

AL

CA

WA

WV

CT

DE

FL

GA

80+ metric tons

OH

KY

WY

IA

VA

MT

NJ

TX

IN

IL

PA

Full-cycle GHG EmissionsOil Sands & U.S. Refined Crudes

18

Greenhouse Gas Emissions - Carbon

● Carbon regulation (Alberta)

Covers 100% of oil sands

$15 carbon price since July 2007

$400 million into Technology Fund

• Over 90 CCEMC funded projects

● Reducing GHG Emissions

Energy efficiency

• Cogeneration, less steam

Technology and innovation

• Solvent assisted

• Waterless extraction

CCS – Shell Quest project

0

5

10

15

20

25

Oil Sands GHG Emissions/bbl

28%

1990 2012

19

Source: Environment Canada – National Inventory Report 2014

20

Joint Oil Sands Monitoring Increased sites (87 to

172)

More substances

Greater sensitivity

Broader geography

Standard methodology

Publicly available data

$50 million per year

In addition to required project monitoring

“… will be one of the most progressive and comprehensive environmental

monitoring programs of any industrially-developed region in the world. “

21

1. Stringency

22

Source: International Regulatory Study - WorleyParsons

2. Transparency

23

Source: International Regulatory Study - WorleyParsons

3. Compliance

24

Source: International Regulatory Study - WorleyParsons

+

25

Canada’s Oil Sands Innovation Alliance (COSIA)

Canada’s Oil Sands Innovation Alliance (COSIA) is an alliance of oil sands producers focused on accelerating the pace of improvement in environmental performance in Canada's oil sands through collaborative action and innovation.

• An alliance of 13 oil sands producers, representing 90 per cent of production from the Canadian oil sands

• Four environmental priority areas; • Water• Tailings• Land• Greenhouse Gas Emissions

25

+

26

Examples of Innovation/Technology

COSIA

Shared 560 technologies that cost $900 million to develop

185 projects underway with a cost of over $500 million

Tailings Accelerated Dewatering

Cross Flow Filtration

Filter Press Project

Tailings Centrifuge

Greenhouse Gases The Algae Project

Gas-Turbine Once Through Steam Generator: Co-Generation

Waste Heat Recovery

Land reclamation Caribou Habitat Restoration

Oil Sands Vegetation Cooperative

Topsoil Reconstruction

Waste Heat Recovery

Oil Sands Vegetation Cooperative

Filter press project

26

Jobs and

Economic Benefits

● Economic impact generated (GDP)

$3.9 trillion across Canada

● Jobs Created

149,000 direct in 2014 growing to 790,000 in 2038

(direct, indirect and induced across Canada)

● Government Revenues

Federal Tax = $574 billion

Provincial Tax = $353 billion

• Alberta portion $303 billion (86%)

Alberta Royalties = $590 billion

Canadian Oil Sands Benefits (CERI)(over 25 years from 2014 to 2038)

Federal Taxes

Provincial

Taxes

Provincial

Royalties

Government Revenues by Source

$1.5 trillion over 25 year period

The oil sands creates jobs, businesses and government revenues across Canada.

Source: CERI Sept 2014

Aboriginal Participation in Oil Sands Development

• Aboriginal Companies:

• Wood Buffalo & Lac La Biche contracts in 2013 = $1.9B

• Value of contracts over last 15 years = $10B

• Aboriginal Employees in permanent jobs in 2010 = 1,700+

• Contributions to Aboriginal communities in 2011-2013 = $26M

• Aboriginal consultation funding in 2013 = $12M

Source: OSCA

Canada

30

BC SKAB

MB

QC

ONNB NS

PEI

NL

YT NWT NU

Total: 2370

6141123191

60

114

2641

3

191

2012-13 Suppliers across Canada

31

● Manufacturers across Canada sold a combined total of $4.8 billion in manufactured goods and services into Alberta’s oil sands (CME 2009)

From all regions of Canada

Wide range of industrial goods including chemicals, steel products, machinery and equipment, forged and stamped metals, and electrical components.

● Investment will remain strong in Canada’s oil sands

● Canadian manufacturers have a significant opportunity to continue selling into the oil and gas supply chains as the industry grows.

Economic Impact of the Industry

32

Performance + Communications = Reputation

33

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