Investment Prospects Analysis of Bituminous Sands Exploitation in Canada in the Context of Falling Oil Prices

Student: Kharitonov Vladislav

Faculty: Faculty of World Economy and International Affairs

Educational Programme: World Economy (Bachelor)

Final Grade: 9

Year of Graduation: 2016

The following work analyses the investment prospects of bitumen sands exploration in Alberta province of Canada. The factors determining the profits of oil sands companies are classified and discussed. Various methods of bitumen extraction are broke down into processes to determine cost-effective methods of production. CAPM model is build to identify the riskiness of bitumen oil sands exploration and NPV/BEP analysis is made in order to project the vitality of the bitumen sands exploration. The results show the ineffectiveness of conservative methods of exploration that include full upgrading and bitumen diluting in the context of long term low oil prices. The NPV analysis show relative effectiveness of partial upgrading. The whole industry is vastly dependable on political decisions in terms of ecological regulations and infrastructure for bitumen transportation. If the small start up projects show to be scalable the whole industry will be profitable even in the context of low oil prices.

Full text (added May 12, 2016)

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