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Category: Commodity

Oil sands production to reach record this year

S&P has raised its 10-year production outlook for the Canadian oil sands. The latest forecast expects oil sands production to reach a record annual average production of 3.5 million bbl/d in 2025 (5% higher than 2024) and exceed 3.9 million bbl/d by 2030; half a million barrels per day higher than 2024. The 2030 projection is 100,000 bbl/d (or nearly 3%) higher than the previous outlook. Despite a lower oil price environment, the analysis attributes the increased projection to favourable economics, as producers continue to focus on maximising existing assets through investments in optimisation and efficiency. While large up-front, out-of-pocket expenditures over multiple years are required to bring online new oil sands projects, once completed, projects enjoy relatively low breakeven prices.

Smelters process Chilean concentrate for free

The mid-year negotiations between Antofagasta (AMSA) and Chinese smelters have concluded with a historic settlement of $0/0¢. While unprecedented, the outcome is not surprising, as it lands slightly above the midpoint of the believed negotiating range, from -$15/-1.5¢ proposed by Antofagasta +$10/1.0¢ from the Chinese smelters. Moreover, this result aligns with market participants' rumours circulating prior to the agreement. Separately, rumours suggest Q3 contract negotiations between one top miner and Chinese smelters concluded at levels ranging from -$25/-2.5¢ to (+)$5/0.5¢.

Production begins at Dukouhe-Qilibei

PetroChina has started production at Dukouhe-Qilibei, the last of three major sour gas fields in its high-sulphur Chuandongbei cluster in southwest China. The Dukouhe-Qilibei field’s hydrogen sulphide content reaches up to 17.1%, the highest of any integrated gas field currently in production in China. PetroChina confirmed that commissioning was completed on 30 June, with the Dazhou gas processing plant now running at its full design capacity of 4 million cubic metres per day. The Chuandongbei cluster originally comprised three key sour gas block: Luojiazhai, Tieshanpo, and Dukouhe-Qilibei, and was initially developed under a partnership between Chevron and PetroChina, with Chevron leading the early-phase project development. However, Chevron exited the project in 2020, transferring full control to PetroChina following operational delays and cost challenges. PetroChina says that the completion of Dukouhe-Qilibei solidifies its capabilities in handling high-sulphur content gas fields and marks a significant boost to China’s domestic gas supply, particularly in inland regions with growing industrial demand. n