Warren Buffett and Bill Gates toured this week the Canadian Natural Resource Ltd’s (NYSE:CNQ) Horizon oil sands project. The $8.7 billion development involves the extraction of oil sands reserves 70 km north of Fort McMurray, Province of Alberta.
The men, according to Reuters, were given details on the Canadian oil industry by the Canadian Association of Petroleum Producers (OTCQB:CAPP). Greg Stringham, vice president of markets and fiscal policy at the association, said “they were asked to come up and do a short presentation”.
The Horizon Oil Sands Project indicates an estimated 16 billion barrels of bitumen in place, with approximately 6 - 8 billion recoverable barrels under existing mining technologies.
Canada has more than 170 billion barrels of proved oil sands reserves, ranking only second behind Saudi Arabia in oil reserves. Not only has this particular industry a unique position in today’s global energy market, but in terms of future reliable oil supplies, Canada’s oil sands are important since they will likely account for a greater share of U.S. oil imports. Which is why major U.S. oil companies like Sunoco (NYSE:SUN), Exxon/Mobil (NYSE:XOM), Conoco Phillips (NYSE:COP), and Chevron (NYSE:CVX) continue to make significant financial commitments (in the billions) to develop Canada’s oil sand resources.
Alberta’s oil sands deposits were described by Time Magazine as “Canada’s greatest buried energy treasure,” which “could satisfy the world’s demand for petroleum for the next century”. Oil sands production in Canada is predicted to increase to 2.8 million barrels per day by 2015.
With current oil prices above $110 per barrel and the possibility of sustained high prices in the future - it will be interesting to see if more details will emerge as to the exact purpose of this visit made by two of the world’s richest men. A strong possibility of course, is they may be looking for a way to invest some big bucks. If that’s the case, then this is surely it.