Page 4 - NorthAmOil Week 39 2021

NorthAmOil COMMENTARY NorthAmOil

Seeking an exit

Various investors of different kinds are

seeking an exit from Canada’s oil and gas

industry amid improved oil and gas prices

CANADA A variety of investors is seeking to exit Canadian Majors pulling back from the region included
oil and gas, encouraged by higher commodity ConocoPhillips, which sold the majority of its
WHAT: prices and, in some cases, the ongoing shift to oil sands assets for $13.3bn in 2017, retain-
Abu Dhabi’s TAQA is greener operations. These players include oil and ing only its 50% stake in the Surmont project.
the latest company to gas producers, private equity firms that back pri- Meanwhile, Marathon Oil sold its oil sands
reportedly be pursuing vate operators and pension funds. holdings the same year for around $2.5bn.
a sale of its Canadian oil Indeed, it was reported this week that Abu For these companies, it was increasingly more
and gas assets. Dhabi National Energy Co. (TAQA) is seek- appealing to focus on their domestic US opera-
ing to sell its Canadian oil and gas operations tions – particularly onshore shale. Players based
WHY: in their entirety. Separately, pension manager in countries outside the US also joined the exo-
A variety of investors, Caisse de Depot et Placement du Quebec has dus. Royal Dutch Shell sold most of its oil sands
including private equity unveiled plans to sell billions of dollars’ worth assets for $8.5bn, also in 2017. More recently,
firms, operators and of oil assets, including equity stakes in Canada’s Norway’s Equinor completed its exit from the
pension funds, are top crude producers. region in January 2021 under mounting pres-
seeking to exit Canadian However, these moves come as demand for sure to invest in greener projects. And Japan
oil and gas. oil and gas is booming and is anticipated to rise Petroleum Exploration (JAPEX) sold its entire
further still next year. Industry groups such as stake in the Hangingstone oil sands project to
WHAT NEXT: the Canadian Association of Petroleum Produc- Canada’s HE Acquisition in September.
The moves come, ers (CAPP) have warned that instead of encour- In TAQA’s case, the latest news comes as no
however, as demand for aging an overall decrease in global oil and gas surprise, given that the company said around a
oil and gas is rising. investment, moves such as that by Caisse could month ago that it could sell some or all of its oil
result in capital shifting to other major oil pro- and gas assets as part of a strategic review. Reu-
ducers, including Russia. ters reported this week, citing sources familiar
with the matter, that the state-backed company
Exodus had hired advisers to sell its entire holdings in
The exodus of producers from Canada is nothing Canada. The move was reported to be part of a
new – foreign players especially have pulled back drive to reduce the company’s carbon footprint,
from Alberta’s oil sands in recent years. A num- according to the sources.
ber of high-profile exits of international majors Consultancy IHS Markit has estimated that
took place around 2017 as low oil prices and lim- TAQA’s Canadian assets could fetch up to
ited future growth prospects – exacerbated by a CAD1.5 billion ($1.2bn). The assets produced
takeaway capacity crunch – made staying in the around 73,000 barrels of oil equivalent per day
region an unattractive proposition. (boepd) in 2020, accounting for more than 60%

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