• 2 minutes U.S. Presidential Elections Status - Electoral Votes
  • 5 minutes “Cushing Oil Inventories Are Soaring Again” By Tsvetana Paraskova
  • 7 minutes United States LNG Exports Reach Third Place
  • 49 mins https://www.prageru.com/video/whats-wrong-with-wind-and-solar/
  • 53 mins The World Economic Forum & Davos - Setting the agenda on fossil fuels, global regulations, etc.
  • 2 hours Here it is, the actual Complaint filed by Dominion Voting Machines against Sydney Powell
  • 16 hours JACK MA versus Xi Jinping
  • 1 day Tonight Twitter took down Trump's personal account permanently. Trump responded on the POTUS account.
  • 15 hours Researchers Are Harvesting Precious Metals From Industrial Waste
  • 1 hour Minerals, Mining and Industrial Ecology
  • 5 hours Do Republicans like Liz Cheney, Adam Kinzinger, Mitt Romney and now McConnell think voting for Impeachment can save the party ? Without Trump base what is the Republican constituency ? It's over.
  • 2 days CNN's Jake Tapper questions double amputee purple heart recipient GOP Rep's commitment to democracy. Tapper is a disgrace.
  • 2 days A Message from President Donald J. Trump - 5 minutes from The White House directly
Ghana’s Political Meddling Could Derail Its Oil Boom

Ghana’s Political Meddling Could Derail Its Oil Boom

Ghana’s political interference in its…

The Best-Performing Energy Stocks Of 2020

The Best-Performing Energy Stocks Of 2020

No segment of the energy…

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

Premium Content

Statoil Turns Its Back On Canada’s 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:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




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