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Updated June 2021


The supply cost of a resource project is the minimum price needed to recover all capital expenditures, operating costs, royalties, and taxes, as well as to earn a specified return on investment. Supply cost serves as an indicator of a project’s economic viability.

In Situ: Supply costs for in situ projects are around US$40 per barrel (bbl) for expansion projects to US$50/bbl for greenfield projects. Lower initial capital costs support lower supply costs for these projects.

Mining: Supply costs for greenfield mining projects range from US$70/bbl to US$80/bbl. Despite technological innovations and other measures to lower operating costs, significant upfront capital costs at mining projects continue to challenge their economic viability.

Table S3.4 shows 2020 crude bitumen supply costs with a selection of key assumptions, such as capital costs, project capacities, and utilization rates.

Input cost data are based on 2020 Canadian dollars, whereas the resultant supply costs per barrel are converted to U.S. dollars that can be used to compare to the West Texas Intermediate (WTI) benchmark.

The supply cost estimates for 2020 include assumptions based on current carbon regulations, which require oil sands projects that produce more than 100 000 tonnes of carbon dioxide equivalent per year to reduce their emissions beyond a product-specific benchmark set by the highest-performing companies with the lowest emission intensities. Companies exceeding the benchmark can also comply by submitting offsets, performance credits, or payment into the Technology Innovation and Emissions Reduction (TIER) fund. These carbon costs are factored into the supply cost estimates for in situ and mining projects.

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