Low oil prices alone won’t kill off oilsands development, says Canadian Business writer Andrew Leach.
Other factors, such as how much it costs to buy dilution chemicals, the exchange rate, and how much the crude is discounted compared to oil from other sources, also play a role, says Leach.
Further, investors should take into account how many oilsands operations are in production, how many are under construction, and how many are simply planned.
“While existing operations have seen drastic reductions to their cash flows, few, if any, are in danger of shutting-in production at current prices,” he writes.
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