Page 7 - NorthAmOil Week 38 2021

NorthAmOil COMMENTARY NorthAmOil

last year – is worried about just such an eventu- downturn that began in 2014. The buyers have
ality. The oil and gas sector accounts for around a mostly been Canadian producers, who have
quarter of the country’s carbon emissions. steadily consolidated their oil sands positions.
The prospect of stricter emissions rules as Indeed, four Canadian giants – Suncor
well as a clampdown on subsidies has driven Energy, Cenovus Energy, Canadian Natural
the Canadian Association of Petroleum Pro- Resources Ltd (CNRL) and Imperial Oil –
ducers (CAPP) to call on Trudeau to support the along with smaller player MEG Energy account
industry. for around 90% of the country’s oil sands
production.
Seeking reassurances Moreover, the Canadian oil sands continue
“This election result reaffirms the uncertainty to struggle with their public image in relation to
in Canada as we continue to struggle with pub- their GHG emissions, prompting producers in the
lic health and economic issues related to the region to lower emissions and pledge deeper cuts.
(COVID-19) pandemic,” the association said in A joint venture between Japan Petroleum
a September 20 statement. Exploration (JAPEX) and Nexen this week
It added that the industry was ready to con- concluded the sale of its 75% stake in Hanging-
tinue working with the government to rebuild stone Expansion to Greenfire Acquisition Corp.
the economy in a way that “advances Indigenous (GAC). GAC had already purchased the neigh-
reconciliation, achieves environmental goals and bouring Greenfire Hangingstone asset in April,
creates sustainable jobs and opportunities”. after its operators ran into financial difficulties.
CAPP argued that the country’s oil and gas Reuters, meanwhile, quoted one unnamed
industry was a “recognised leader in environ- industry source on September 15 as saying
mental innovation and emissions reduction”, that at least a dozen private equity-backed
before adding: “Every molecule of natural gas upstream assets – valued at between CAD50mn
and barrel of oil not produced in Canada will and CAD500mn – were up for sale. The report
be produced by other nations that do not share chimes with Veritas Investment Research’s
Canadian environmental or human rights analysis in July, which suggested that up to
standards.” CAD13.4bn ($10.6bn) worth of oil sands assets
The association said: “Our ask of the could be put up for sale. The research firm said
federal government is to support Canadian sales would be driven by mounting pressure on
prosperity by getting behind our own coun- super-majors to cut GHG emissions and invest
try’s resources and to trust Canadians to in renewable energy.
protect the environment rather than relying Commenting on the investor sentiment,
on other nations to supply the world’s need meanwhile, GAC CFO David Phung told Reu-
for natural gas and oil.” ters: “I don’t think we are at the point yet where
CAPP’s requests for support come amid a there is a flood, but another $20 per barrel
wave of consolidations throughout the oil and [increase] and we could be there very quickly.”
gas industry as private equity seeks to exit the The oil price recovery is presenting interna-
sector while international oil prices are high. tional investors with a chance to cash in assets
that face increasing opposition from activist
Investor exit investors as well as wavering support from the
The Canadian oil and gas patch has seen a num- Canadian government. This week’s election has
ber of international oil companies (IOCs) divest done little to bolster confidence in Ottawa’s con-
their interests since the start of the industry tinued support.™

Week 38 23•September•2021 www. NEWSBASE .com P7