Page 5 - NorthAmOil Week 39 2021

NorthAmOil COMMENTARY NorthAmOil

Oil and gas investments
are increasingly
competing with cleaner
energy sources for
investment.

of TAQA’s entire oil and gas portfolio. The com- CAPP’s CEO, Tim McMillan, condemned the
pany also says it is among Canada’s top 15 oil move as being “damaging to Canada and irre-
producers by volumes. sponsible to shareholders”, given the backdrop
According to the sources, TAQA is working of rising demand for oil and gas.
with Tudor, Pickering, Holt & Co. (TPH) and
Jefferies. Reuters cited a sale document it had Price push
seen as saying the company would make confi- Meanwhile, a number of private equity firms
dential information presentations to interested are trying to take advantage of higher oil
parties in October. prices to sell off the producers they back. Reu-
TAQA is planning to reduce greenhouse ters reported in mid-September that at least
gas (GHG) emissions from its operations by a dozen private equity-backed Canadian oil
expanding its electricity generation business and gas assets valued at CAD50-500mn ($39-
while selling fossil fuel assets. 394mn) were on sale, according to an industry
source.
Pulling back The current environment for private equity
Like TAQA, Caisse is intending to pull back from firms – and others – to cash in on their Cana-
oil and gas with decarbonisation goals in mind. dian oil and gas investments is estimated to
It was the first major Canadian pension fund to be the best in more than seven years. Indeed,
set a net-zero target, in 2019, and has now said 2014 was when crude prices started falling, and Operators that
that it wants to stop contributing to the growth while they have gone through cycles of recovery
of global oil supplies altogether. since, times have largely remained challenging want to continue
The move to sell stakes in oil producers for Canada’s oil industry. producing oil and
will affect about 10 companies, Caisse’s CEO, Now, though, things are looking up, at least
Charles Emond, said in a briefing, adding that in terms of consolidation and takeaway capac- gas in Canada
current oil and gas prices gave the pension fund ity. Operators that want to continue producing
a good window to sell. oil and gas in Canada are keen to build scale, are keen to build
The fund has been whittling down its oil helping to drive the current wave of consoli-
investments for some time, and now owns dation. Meanwhile, the start-up of Enbridge’s scale.
roughly CAD4bn ($3.1bn) in oil producer assets Line 3 replacement pipeline, set for October 1,
– about half the amount it had 4-5 years ago, is expected to ease a long-standing takeaway
according to Emond. Bloomberg data showed capacity shortage.
that Caisse’s largest energy investments include Despite this, though, production in Canada is
oil sands producers Suncor Energy and Cana- only expected to grow incrementally, while even
dian Natural Resources Ltd (CNRL), in which it leading producers in the country are holding
held a combined CAD1bn ($787mn) in shares back from making major new investments. On
as of June 30. the other hand, if oil and gas demand keeps ris-
The production assets make up around 1% ing, an appetite for more Canadian barrels may
of Caisse’s CAD390bn ($307bn) portfolio, but yet emerge. Much depends on how growing
it has opted to hold on to its existing oil and gas demand can be balanced with the acceleration
pipeline assets, which account for around 2%. of decarbonisation efforts.™

Week 39 30•September•2021 www. NEWSBASE .com P5