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Oil Prices Lag Despite Early OPEC Cuts

Oil Prices Lag Despite Early OPEC Cuts

OPEC already started cutting crude…

Chevron Bets On Canada Shale After Majors’ Oil Sands Exodus

Shale

After selling part of its Canadian downstream business, Chevron is now betting on Canadian shale development in a welcome move for the local oil industry that has seen oil majors dump stakes in Canada’s oil sands this year.

Chevron Canada Limited said on Monday that it was moving into development on a portion of its lease holdings in the Kaybob Duvernay area of west-central Alberta, following a successful three-year appraisal program.

The initial development program is expected to comprise some 55,000 acres of Chevron’s operated position in the Duvernay resource in the area known as East Kaybob. The program will utilize long-term infrastructure development and service agreements with Pembina Pipeline Corporation and Keyera Corporation, with service expected to be available during the second half of 2019.

Earlier this year, Chevron sold its Canadian downstream fuels business—including 129 Chevron-branded retail service stations in British Columbia and a refinery in Burnaby, BC—to Parkland Fuel Corporation.

Chevron’s downstream asset sale in Canada followed an exodus of oil supermajors from Canada’s oil sands in the first half of this year, in which Shell sold oil sands interests to Canadian Natural Resources for around $8.5 billion, and ConocoPhillips divested oil sands assets to Cenovus in a $13.3 billion deal.

Related: Is A Venezuelan Default Inevitable?

Commenting on the Duvernay shale play, Chevron Canada president Jeff Gustavson said in the company statement:

“The Duvernay formation is one of the most prospective liquids-rich shale plays in North America.”

In September, Canada’s National Energy Board (NEB), together with the Alberta Geological Survey (AGS), released a new resource assessment for the Duvernay Shale that adds significant quantities of marketable light oil resources in the province, as well as natural gas and natural gas liquids (NGLs). The NEB has estimated that the Duvernay contains 3.4 billion barrels of marketable light oil and field condensate, or 17 years of Alberta’s annual production. The new resource assessment also shows marketable gas resources equivalent to nearly 25 years of Canada’s annual consumption.

By Tsvetana Paraskova for Oilprice.com

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