Page 4 - NorthAmOil Week 29 2021

NorthAmOil COMMENTARY NorthAmOil

Speculation emerges

about oil sands sales

A new report has suggested that billions of dollars’

worth of oil sands assets could come up for sale as

super-majors pivot to renewables

ALBERTA A new report has suggested that up to has been underway in the oil sands over the past
CAD13.4bn ($10.7bn) worth of oil sands few years.
WHAT: assets could be put up for sale. According to the A number of international oil companies
Up to CAD13.4bn report, ‘Climate policy creates a buyers’ mar- (IOCs) – including large independents – have
($10.7bn) worth of oil ket’, published by Veritas Investment Research, sold their oil sands assets since the start of the
sands assets could be put sales would be driven by growing pressure on industry downturn that began in 2014. The
up for sale, according to super-majors to cut greenhouse gas (GHG) buyers have mostly been Canadian produc-
a new report. emissions and invest in renewable energy. ers, who have steadily consolidated their oil
The Canadian oil sands continue to struggle sands positions. Today, four Canadian giants
WHY: with their public image, despite efforts being – Suncor Energy, Cenovus Energy, Canadian
Super-majors are under made by producers in the region to lower Natural Resources Ltd (CNRL) and Imperial
mounting pressure to emissions – include recent net-zero emissions Oil – along with smaller player MEG Energy
reduce emissions, and pledges by some leading players. Thus it would account for around 90% of the country’s oil
offloading oil sands not be surprising if certain super-majors that sands production.
assets could be one currently retain assets in the oil sands came to Major transactions include ConocoPhil-
option for doing that. view exiting the region as a relatively appealing lips’ $13.3bn sale to Cenovus in 2017, which
option for pivoting more to renewables and included a 50% interest in the Foster Creek
WHAT NEXT: boosting their public image. Christina Lake oil sands partnership, as well as
Canada’s leading “Given the pressure to both cut emissions certain conventional gas assets. Also in 2017,
domestic oil sands and invest in renewable energy, we expect the Marathon Oil sold its Canadian subsidiary to
players would be the super-majors to shed mostly upstream oil and Royal Dutch Shell and CNRL for $2.5bn. And
most likely buyers. gas assets to fund investments into renewables,” in 2019 Devon Energy sold its oil sands assets,
a Veritas analyst, Jeffrey Craig, wrote in the also to CNRL, for $2.8bn.
report. Craig said that the four giants in particular,
which he described as Canada’s “Final Four”,
Continuing trend would be the most likely buyers of any further
If this were to play out as Craig has predicted, oil sands assets that may now be put up for sale.
it would mark the continuation of a trend that “A poor reputation for oilsands internationally

The oil sands have
become increasingly
concentrated in the
hands of a few major
Canadian producers in
recent years.

P4 www. NEWSBASE .com Week 29 22•July•2021