Domestic interest in Alberta’s oil sands is returning, even as international companies are withdrawing their stakes in Canada’s oil sands, according to the province’s Energy Minister Marg McCuaig-Boyd.
It is “business as usual” for multinational oil firms to change the profiles of their assets according to short or medium-term profits. McCuaig-Boyd told Bloomberg this week that investments by Canadian Natural Resources Ltd., Cenovus Ltd., and Athabasca Oil Corp. are “encouraging.”
Royal Dutch Shell agreed to sell a majority of its assets in Canadian oil sands projects to Canadian Natural Resources last month for a total of $8.5 billion.
“I see it as more glass-half-full because we have Alberta companies showing support for what we’re doing,” McCuaig-Boyd said at the Finance Future of Energy Summit hosted by Bloomberg in New York.
Chevron and Royal Dutch Shell are still keeping their traditional shale oil projects in Montney and Duvernay alive, despite abandoning their oil sands stakes.
“It’s not like they’ve truly left,” she said. “They’re just changing some of their business.”
To conserve funds and ensure continuing profitability, oil majors are cancelling or postponing investments in new production ventures, especially complex, costly projects like the exploitation of Canadian tar sands and deep offshore fields that only turn a profit when oil is selling at $80 to $100 or more per barrel. In contrast, the Permian Basin in Texas has attracted a lot of new investors in recent months due to low extraction costs and slowly recovering West Texas Intermediate prices.
At the time of this article’s writing, Brent barrels were trading at $51.56.
In December, Statoil announced its decision to sell off its oil sands assets to Athabasca Oil Corp. in a deal worth $832 million. The Norwegian firm spent nearly a decade in Alberta’s oil sands, and will exit the play with a loss of at least $500 million.
By Zainab Calcuttawala for Oilprice.com
