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Koch Industries has sold its oil sands assets to Canadian Cavalier Energy, the Financial Post reports, noting that the deal closed two months ago.
Cavalier is a subsidiary of family owned Paramount Resources.
The Globe and Mail cited information from the Alberta Energy Regulator, which said the assets involved in the sale consisted of five leases, with Koch abandoning the rest.
“The majority of Koch Oil Sands licences have been transferred to Paramount Resources Ltd. All of the remaining licences are for well sites and [they] have been abandoned, which means that they have been permanently sealed and taken out of service,” a spokesman for the Alberta Energy Regulator told the Globe and Mail.
Koch followed in the footsteps of other energy majors that decided to leave the Canadian oil sands over the past few years. Shell, ConocoPhillips, Equinor, and Devon Energy all left the oil sands to focus on lower-cost, quicker return projects.
In the years prior to the asset sale, Koch has blamed the Alberta NDP government for the regulatory uncertainty that, the company said, forced it to suspend a planned US$601-million (C$800-million) project in the province.
Even earlier than that, Koch said Canada’s signing of the Kyoto Accord on emissions reduction was the reason for it to abandon another project, Fort Hills, which would have sucked in some US$2.6 billion (C$3.5 billion) in investments. Fort Hills is now Suncor property and operating, despite the Kyoto Accord.
Regulatory obstacles are still one of the main reasons for the lukewarm investment climate in Alberta, according to industry insiders polled by the Daily Oil Bulletin earlier this year.
As many as two-thirds of the 150 respondents in the survey, which took place in April, said they were pessimistic about the immediate prospects of the oil and gas industry, the Daily Oil Bulletin said, with over a third being very pessimistic. To make the picture even grimmer, only 3 percent said they were very optimistic, with 27 percent expressing some degree of optimism.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.