Supply Cost


This section provides an overview for supply cost:

The supply cost for a resource project can be defined as the minimum constant dollar price required to recover all capital expenditures, operating costs, royalties, and taxes, as well as to earn a specified return on investment. The supply cost calculation determines a value received per unit of production. As such, supply costs serve as an indicator of a project’s economic viability.

In this section, the supply costs for crude bitumen, conventional crude oil, and natural gas are discussed.

Crude bitumen supply costs are calculated for in situ and mining projects, with further analysis given for brownfield and greenfield developments.

Conventional crude oil supply costs are calculated by Petroleum Services Association of Canada (PSAC) area, well type, and density.

Natural gas supply costs are calculated by PSAC area for conventional natural gas and by type for unconventional gas. Further analysis is given for well type and by processing requirements.