June 2, 2013 Oil Infrastructure Research Roundtable Getting oil out of Canada: Heavy oil diffs expected to stay wide and volatile Equity Research Growing concerns about 2013-15 WCS Longer-term WCS outlook is better Arjun N. Murti In conjunction with the deep dive supply/demand Longer-term – and assuming key projects like (212) 357-0931
[email protected] update we present in this report, we have lowered Keystone XL and Alberta Clipper/Flanagan Goldman, Sachs & Co. our base-case 2014 and 2015 outlook for WCS South/Seaway expansion are brought on-line – prices, with risk skewed to the downside. While there is room for more optimism as Canadian Matthew Carter-Tracy we see significant demand for Canadian heavy heavy oil/oil sands producers would finally have a (212) 902-9429
[email protected] crude oil in the United States, the main question direct connection to the US Gulf Coast. Once Goldman, Sachs & Co. at this time is whether sufficient pipeline connected, we would expect WCS to price relative takeaway capacity will exist that crosses the to Maya, adjusted for quality differences and Theodore Durbin Canada/US border, with Keystone XL (TRP) and transportation costs, or about Maya-$13/bbl. Such (212) 902-2312
[email protected] Alberta Clipper (ENB) the key projects to watch. an environment is possible in 2016-2017. Goldman, Sachs & Co. XL and Clipper key to getting oil to US CNQ to Sell on 2014E WCS concerns Brian Singer, CFA Ongoing approval delays at Keystone XL are well Given our concerns over 2013E-2015E WCS (212) 902-8259
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