Heavy Oil Incentives Remain Critical to Several Projects in a Lower-Price Environment

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Due to the price discounts to light oil and high costs associated with developing heavy oil assets, fiscal incentives can often be a crucial determinant of commercial viability. These incentives, in combination with oil prices that rose significantly above average historical levels and new technologies, encouraged global heavy oil production to grow almost 20% from more than 5.4 million bd in 2010 to nearly 6.5 million bd in 2016. Global production growth of heavy oil between 2017 and 2020 is expected to come from planned fields in the Middle East, including Iran’s South Azadegan field and Iraq’s Halfaya field, aided by the region’s lower costs.

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