26-11-04 Reserves of oil and natural gas dropped last year as a sharp increase in capital spending failed to counter declines from conventional sources.
In its annual review, the Canadian Association of Petroleum Producers said reserves of conventional oil and natural gas declined, while those of mining and in-situ oil sands projects rose. Still, overall reserves dropped by the equivalent of more than 300 mm barrels, the largest of the three consecutive yearly declines since 2001.

Natural gas reserves fell the most, dropping to 56.5 tcf from 59.1 tcf last year, with 59 % of production replaced. A major contributor was a one-time downward revision in Alberta, where that province's Energy and Utilities Board eliminated 7.5 tcf in reserves from 7,000 single-well pools.
CAPP vice-president Greg Stringham said the overall decline cannot be attributed solely to that change. He said there were other, upward revisions in Alberta from larger producers. Downward reserves revisions from offshore projects inAtlantic Canada contributed to the declines.

Conventional oil reserves dropped to 4.3 bn barrels in 2003, with just 56 % of production being replaced. In the oil sands, production topped 1 mm bpd for the first time at the end of 2003, with reserves for in-situ projects rising by 8 mm barrels to 2.03 bn and for mining projects, up 332 mm to 5.2 bn.
Capital spending jumped to $ 28.8 bn, as efforts to boost conventional reserves and production surged. In the oil sands, capital spending dipped to $ 5 bn from the record $ 6.7 bn of 2002.

CAPP's figures are compiled from several sources and reflect the measure of "established reserves" common in the United States, but now superseded in Canada for financial reporting purposes by what are viewed as more restrictive standards.