Berkshire Hathaway's third-quarter regulatory filings show that the Warren Buffet-owned firm has abandoned Suncor Energy - a Canadian company that greatly benefitted from the billionaire's financial show of support in 2013.
Last year, Hathaway increased its involvement in Suncor, but recent documents showing the major investment firm's withdrawal from the oil, gas and minerals company suggest that Canada's energy sector continues to struggle through the oil price crisis.
As of September, Suncor, Canada's largest oil producer, looked to abandon some of its high-cost and greenhouse-gas intensive oil sands assets, according to CEO Steve Williams.
Suncor dumped the deposits in question in order to ease the effect of rules that were created to maximize the output from oil sands on land leased from the government.
The cost-cutting plan to abandon the sites aligns with efforts by efforts led by other oil companies to cope with low commodity prices and challenging environmental regulations.
Still, Suncor has been eager to acquire assets unrelated to oil sands by investing in major oil and gas projects even as the company's competitor's decline to do so.
Related: Is The U.S. Set To Become An LNG Powerhouse
In its third major acquisition deal this year, the company shifted focus out of Canada's oil sands by agreeing to buy a 30-percent stake in the Rosebank oil and gas project in the North Sea for an initial consideration of $50 million. If the project - which has reached its final design phase - gets the go-ahead from all participating partners, it will receive an additional $165 million from Suncor, the deal's contract states.
Late last month, the Canadian National Energy Board lowered its expectations for the oil price recovery on Wednesday due to the falling costs of energy production and challenging environmental regulations.
By 2020, the board says that barrel prices will rise to an inflation-adjusted $68, which is $12 less than the agency's previous prediction. The government's 2040 projection fell by $17 from its January figure of $90.
By Zainab Calcuttawala for Oilprice.com
More Top Reads From Oilprice.com:
Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More
Comments