Page 9 - NorthAmOil Week 05 2023

NorthAmOil POLICY NorthAmOil

SPR bill passes US House of Representatives

US A bill on the Strategic Petroleum Reserve (SPR) to suffer because of the backwards agenda that
has passed the US House of Representatives. The House Republicans are advancing,” US Secre-
legislation, HR21, requires that any release of tary of Energy Jennifer Granholm said before
crude from the SPR is tied to a plan to increase the vote.
oil and gas leasing on federal land, unless there is In March 2022, shortly after Russia’s inva-
a “severe” supply disruption. sion of Ukraine, Biden authorised a record
The Senate will now consider a similar bill. 180mn-barrel sale from the SPR over six months.
But regardless of its chances in the Demo- Then in late October, he announced the sale
crat-controlled Senate, the White House has of another 15mn barrels of oil. These moves
threatened to veto it. resulted in the SPR being drawn down to its low-
The bill, with no chance of passage, is con- est level since 1983.
sidered a ‘messaging’ measure by Republicans, The White House has since said that it wants
who now control the House and are seeking to to refill the reserve when oil reaches about $70
distance themselves from US President Joe Biden per barrel. But in early January, the US Depart-
and the Democrats. ment of Energy (DoE) rejected bids for sales of
The Biden administration withdrew record crude to the SPR.
amounts of oil from the SPR in 2022 in an effort “Following review of the initial submission,
to alleviate high gasoline prices at the pump. This DoE will not be making any award selections
was a major political issue ahead of the midterm for the February delivery window,” a spokes-
elections in November. Indeed, Republicans person told Reuters. “DoE will only select bids
accused Biden of politicising the SPR. that meet the required crude specifications
HR21 would require the same amount of oil and that are at a price that is a good deal for
to come from new leases on federal land as the taxpayers.”
amount drawn down from the SPR. The Biden administration has said it would
“[Biden] will not allow the American people buy 3mn barrels for the SPR in February.™
PROJECTS & COMPANIES

TotalEnergies to buy additional

stake in Fort Hills

ALBERTA TOTALENERGIES EP Canada, a subsidiary of business under attractive conditions, TotalEn-
France’s TotalEnergies, is purchasing an addi- ergies EP Canada will deliver value to the future
tional 6.65% interest in the Fort Hills project shareholders of the spin-off entity”, said TotalEn-
from Teck Resources for CAD312mn ($234mn). ergies’ chief financial officer, Jean-Pierre Sbraire.
The move comes in advance of its spin-off from TotalEnergies said in September that it would
parent TotalEnergies. spin off its oil sands assets, including Fort Hills.
Prior to the transaction, TotalEnergies held “We are not the best shareholders of these assets
a working interest of 24.58% in the project, because as we have a climate strategy, we don’t
which is located 90 km from Fort McMurray want to invest in these assets,” said TotalEnergies’
in Alberta.. After the transaction, it will hold CEO, Patrick Pouyanne, at the time.
31.23%. The balance is owned by Canada’s Sun- In October 2022, Teck sold part of its share in
cor Energy, which is also the operator. Fort Hills to majority owner Suncor for CAD1bn
In September, TotalEnergies announced that ($746mn). Teck said it wanted to shift its focus
it would exit Canada’s oil sands by spinning off to copper in an effort to reduce its involvement
TotalEnergies EP Canada in 2023 in line with in carbon-intensive operations. The mining and
its low-carbon strategy. The spin-off is due to be processing of oil sands crude is generally carbon
voted on at TotalEnergies’ annual shareholders’ intensive, as well as costly.
meeting in May 2023. The Fort Hills project, an open-cast truck and
Through the acquisition of an additional shovel mine, has run into various challenges,
interest in Fort Hills, TotalEnergies is building including operational problems, delays and cost
the future for the spin-off entity into an asset over-runs. Majority owner Suncor reported last
with long-term growth potential, it said. It also year that it anticipated 5% lower gross produc-
holds a 50% working interest in the nearby Sur- tion as well as higher operating costs for three
mont project. years out to 2025 because of its plans for improv-
“By seizing this opportunity to grow its ing the facility.™

Week 05 02•February•2023 www. NEWSBASE .com P9