• 4 minutes Tariffs to derail $83.7 Billion Chinese Investment in West Virginia
  • 9 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 17 minutes Kaplan Says Rising Oil Prices Won't Hurt US Economy
  • 1 hour Saudi Arabia turns to solar
  • 5 hours Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 21 hours Kaplan Says Rising Oil Prices Won't Hurt US Economy
  • 16 hours Could oil demand collapse rapidly? Yup, sure could.
  • 10 hours Corruption On The Top: Netanyahu's Wife Charged With Misuse of Public Funds for Meals
  • 3 hours Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 16 hours Gazprom Exports to EU Hit Record
  • 16 hours OPEC Meeting Could End Without Decision - Irony Note Added from OPEC Children's Book
  • 5 hours Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 12 hours U.S. Withdraws From U.N. Human Rights Council
  • 20 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 14 hours What If Canada Had Wind and Not Oilsands?
  • 14 hours "The Gasoline Car Is a Car With a Future"
  • 1 day EVs Could Help Coal Demand
  • 9 hours EU Confirms Trade Retaliation Measures vs. U.S. To Take Effect on June 22
  • 15 hours Sell out now or hold on?
Alt Text

Energy Efficiency Adds Value To Home Prices

A new study has suggested…

Alt Text

Global Energy Consumption Soars To New Heights

The new BP Statistical Review…

Jen Alic

Jen Alic

 

More Info

Trending Discussions

Total Dumps Canadian Oil Sands Project for $1.65bn Loss

Total Dumps Canadian Oil Sands Project for $1.65bn Loss

France’s Total SA (NYSE: TOT) will sell its 49% stake in its Canadian oil sands project to Suncor Energy Inc. for $500 million, netting the French oil giant a $1.65 billion loss on the beleaguered project.

Total would have had to spend another $5 billion (at least) on the Alberta oil sands Voyageur Upgrader project over the next five years—an investment that cannot be justified according to its executives.

The project is beleaguered by increasing labor costs, a shortage of labor and the falling prices of Canadian heavy crude against rising US oil production. Profit margins have narrowed to the extent that the project is no longer economically feasible.

The sale to Canada’s Suncor (NYSE: SU)—from which Total purchased the project in 2010--and the resulting loss hasn’t affected Total shares to any significant extent as of the time of writing. These net losses won’t be reflected until Total releases its first quarter 2013 results.

Not only does the Total divestiture raise questions about the long-term viability of Canadian oil sands investments, it also raises questions about whether the controversial Keystone XL pipeline project is really in the US’ interests—at a time when US oil output is rising and Canada’s oil sands are becoming less strategically advantageous.

Total is still hanging on to two other oil sands projects in Canada—at Fort Hills and Joslyn—and for now there is no talk of divesting, but later this year Total will make a final decision on its Fort Hills investment, according to Bloomberg.




Back to homepage

Trending Discussions


Leave a comment
  • Mark chambers on April 01 2013 said:
    Let me guess, they are waiting to hold out for more money.
  • Kevan on April 02 2013 said:
    Let's keep up the protests and litigation and drive the costs even higher. They think with their wallets.

Leave a comment




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