What is Oil?

Crude oil is a black, brownish or amber liquid that is a complex mix of hydrocarbons. It consists of carbon, hydrogen, sulphur, nitrogen, oxygen and metals.

Crude oil is classified as light, medium, heavy or extra heavy. Heavy oil refers to oil with a thick consistency that does not flow easily, often requiring increased technology to extract. Light oil can flow naturally to the Earth's surface and is generally extracted from the ground using pumpjack technology. It's also characterized by its density, making it either conventional or unconventional.

Crude oil is found in sedimentary rocks formed over millions of years by the accumulation in sedimentary basins in sand, silt and the remains of plants and animals. Canada has seven distinct regions of sedimentary rock:

  • Western Canada Sedimentary Basin
  • Atlantic Margin
  • Arctic Cratonic
  • Arctic Margin
  • Eastern Cratonic
  • Intermontane
  • Pacific Margin


Conventional crude oil is oil that flows naturally or can be pumped to the surface without being heated or diluted. This includes light, medium and heavy forms of oil. Conventional deposits are found between layers of saltwater and raw natural gas. The layer of raw natural gas puts pressure on the crude oil reservoir, causing it to flow out when a well is initially drilled.


Crude oil the does not flow or cannot be pumped without being heated or diluted is called unconventional crude oil. Unconventional oil deposits include bitumen and extra heavy oil that is thick, viscous and more difficult to produce than conventional oil. Canada's oil sands are an example of unconventional oil.


Atlantic Canada is currently the only region producing oil offshore. However, there is significant resource potential in Canada's Arctic and several companies currently hold exploration licences in the region. Atlantic Canada's offshore exploration, development and production industry is thriving with five producing projects, one development project and major exploration programs planned for the coming years.