• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 43 mins The Tony Seba report
  • 7 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 14 hours Renewables to generate 50% of worldwide electricity by 2050 (BNEF report)
  • 10 hours Kenya Eyes 200+ Oil Wells
  • 9 hours Are Electric Vehicles Really Better For The Environment?
  • 23 hours Oil prices going Up? NO!
  • 4 hours LNG Shortage on the Way
  • 19 hours Saudi Arabia turns to solar
  • 2 days Oil prices going down
  • 1 day China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 1 hour Could Venezuela become a net oil importer?
  • 2 days Could oil demand collapse rapidly? Yup, sure could.
  • 10 hours OPEC soap opera daily update
  • 2 hours Sell out now or hold on?
  • 1 hour No LNG Pipelines? Let the Trucks Roll In
  • 2 days Tesla Closing a Dozen Solar Facilities in Nine States
Alt Text

Why OPEC+ Needed To Add More Oil

OPEC’s decision to increase production…

MINING.com

MINING.com

MINING.com is a web-based global mining publication focusing on news and commentary about mining and mineral exploration. The site is a one-stop-shop for mining industry…

More Info

Trending Discussions

Statoil Turns Its Back On Canada’s Oil Sands

Oil Sands

Statoil ASA, (NYSE:STO) the Norwegian-owned oil and gas major, does not believe that it has a future in the Canadian oil sands.

Citing concerns over profitability, the company said on Wednesday that it will sell its Kai Kos Dehseh (KKD) assets in the Alberta oil patch to Athabasca Oil (TSX:ATH) and take a loss of at least $500 million.

“This transaction corresponds with Statoil’s strategy of portfolio optimization to enhance financial flexibility and focus capital on core activities globally,” Statoil said in a statement. Through the sale, a cash and share transaction totaling CAD$832 million, Statoil will earn a 20 percent stake in Athabasca Oil. But the divestment will also trigger an impairment of between USD$500 million to $550 million.

The deal with Athabasca Oil involves two oil sands leases, a 24,000 barrel a day test project and a greenfield facility which was expected to produce 40,000 barrels a day – the latter of which Statoil shelved in 2014.

The Norwegian oil company entered KKD through the acquisition of North American Oil Sands Corporation in 2007. In 2011 PTTEP acquired a 40 percent interest, and in 2014 Statoil and PTTEP agreed to divide their respective interests in KKD. Since then, Statoil has continued as owner-operator of the Leismer and Corner projects.

Statoil, of course, is not the first European company to scale back investments in the Canadian oil sands, which have been hit hard by the crude oil price collapse. France's Total SA (NYSE:TOT) shelved its Josyln project in 2014, and also divested some of its interest in the $13.5 billion Fort Hills facility to Suncor (TSX:SU). Related: Bakken Oil Production Soars After Long Decline

Last year Royal Dutch Shell (LON:RDSA) pulled the plug on the development of its Carmon Creek thermal oil sands project and took a $2 billion charge as a result.

American companies are also taking a hard look at the oil sands. In October, Exxon Mobil (NYSE:XOM) said it would have to cut its oil reserves by 19 percent, including removing 3.6 billion barrels from its books, from the Kearl oil sands project in northern Alberta.

Even with prices climbing above $50 a barrel, oil sands producers are challenged by high upfront capital costs – making new projects difficult - new carbon emissions regulations and limited access to pipelines, which forces companies operating in Canada to accept lower prices for their products.

“Since we entered the oil sands in 2007, our portfolio has changed and also the energy markets have shifted quite fundamentally since then,” Paul Fulton, Statoil’s country president, told The Globe and Mail. “We’ve seen a decline in the oil price, and Statoil has a broader portfolio of assets that it needs to allocate its capital to.”

By Andrew Topf via Mining.com

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News