Shell has struck a deal to sell all its oil sands production assets in Canada, except for a 10-percent stake in the Athabasca Oil Sands Project, as part of its $30-billion divestment program aimed at reducing its debt load that it accumulated with the acquisition of BG Group.
The total net value of the deal is $7.25 billion, and the buyer is Canadian Natural Resources, which will partner with Shell on another deal: the acquisition of Marathon Oil Canada Corporation, which has a 20-percent stake in the AOSP. The stake will be split equally between the partners, each contributing $1.25 billion in cash for the purchase. This will increase Shell’s holding in the project to 20 percent.
In addition, Shell will remain the operator of two non-production projects: the Scotford upgrader, which turns heavy oil sands crude into lighter petroleum, and the Quest carbon capture and storage project in a bid to maximize the returns from its Canadian downstream operations, the company said.
According to Bloomberg, the deal will bring Shell much closer to its $30-billion divestment target, after earlier this week it finally closed the negotiations around the split of its 20-year-old joint venture with Saudi Aramco in the U.S., Motiva. The split will result in a $2.2-billion gain for Shell, paid by Aramco. The Anglo-Dutch giant will also keep control of two refineries in Louisiana, while Aramco will remain the sole operator of the Port Arthur refinery in Texas, the biggest in the country.
In addition to slimming down Shell’s debt, the latest deals reflect the company’s adjustment to the new oil price normal, coupled with the intensifying global drive to cut carbon emissions, with the oil industry seen as one of the main culprits behind them.
A recent report ranked Shell among the eight Big Oil companies responsible for as much climate-affecting pollution as the United States, alongside Aramco, Exxon, Gazprom, Iran’s NIOC, and BP.
By Irina Slav for Oilprice.com
