Page 6 - NorthAmOil Week 43 2022

NorthAmOil INVESTMENT NorthAmOil

Teck to exit Fort Hills oil sands project

ALBERTA CANADIAN miner Teck Resources will sell its 24.6% is owned by French super-major TotalEn-
stake in the Fort Hills oil sands project to Suncor ergies. Canada-based Suncor is the operator.
Energy for CAD1bn ($737mn). In its general financial results, Tech reported
Teck said it is shifting its focus to copper in an that it had lost CAD195mn or CAD0.37 per
effort to reduce its involvement in carbon. The diluted share in the third quarter, which ended
mining and processing of oilsands crude is espe- on September 30. This compared with a profit
cially carbon-intensive, as well as pricey. of CAD816mn ($599mn), or CAD1.51 ($1.11)
“This transaction advances our strategy of per diluted share in the same quarter in 2021.
pursuing industry-leading copper growth and Revenue in the third quarter totalled CAD4.7bn
rebalancing our portfolio of high-quality assets ($3.5bn), compared with CAD4.0bn ($2.9bn) a
to low-carbon metals,” noted Teck’s CEO, Jona- year earlier.
than Price, in a third-quarter earnings call with The Fort Hills project, an open-cast truck
analysts on October 26 . and shovel mine, has been problematic. It has
Teck reported a loss in third-quarter of had operational problems, delays and cost
CAD195mn ($143mn), or CAD0.37 ($0.27) per overruns. Majority owner Suncor has reported
share, in a one-time charge related to the sale of that it anticipates 5% lower gross production
the troubled oil sands mine. as well as higher operating costs for three years
The Vancouver-based company said that until 2025 because of its plans for improving
as a result of the deal for Fort Hills, it also had the facility.
an after-tax, non-cash impairment charge of TotalEnergies said in September that it will
CAD952mn ($699mn) in the third quarter of spin off its oilsands assets, including Fort Hill.
2022. “We are not the best shareholder of these assets
Teck has had a 21.3% stake in Fort Hills, in because as we have a climate strategy, we don’t
northern Alberta. The sale increases Suncor’s want to invest in these assets,” said CEO Patrick
interest in the project to 75.4%. The remaining Pouyanne at the time.™

ExxonMobil to sell Montana refinery

MONTANA EXXONMOBIL has agreed to sell its refinery oil grades. Par Pacific said it is evaluating renew-
in Billings, Montana, to Par Pacific Holdings for able fuels opportunities to supplement the
$310mn. ExxonMobil is seeking to reduce its refinery’s conventional fuel production and to
refining business except near the US Gulf Coast use its existing market position in Washington
and in the Midwest. to reduce the carbon intensity of its fuel sales in
The Montana refinery has a capacity of 63,000 accordance with the recently enacted Washing-
barrels per day (bpd). ton low-carbon fuel standard.
The deal includes pipeline assets linked to In addition to the refining assets, the trans-
the refinery and interests in oil product termi- action includes a 65% interest in an adjacent
nals locally in Montana and in Washington State co-generation facility and an expansive market-
in the Pacific Northwest, as well as hydrocarbon ing and logistics network in the Rocky Mountain
and other inventory to be valued at closing. and West Coast regions.
Par Pacific expects to fund the acquisition The logistics assets include the wholly owned
with cash on hand and availability under exist- 70-mile (112-km), 55,000 bpd Silvertip Pipeline,
ing credit facilities, based on liquidity of approx- a 40% interest in the 750-mile (1207-km), 65,000
imately $495mn on September 30, 2022. bpd Yellowstone refined products pipeline, and
The hydrocarbon inventory is expected to be seven refined product terminals.
financed by a new working capital facility. Total storage capacity across the refinery and
The transaction is anticipated to close in the logistics locations totals 4.1mn barrels of oil.
second quarter of 2023. The acquisition also includes a long-term Exx-
“This acquisition will significantly enhance onMobil-branded fuels marketing arrangement
our scale and geographic diversification and to supply approximately 300 retail locations.
underpins our focus on pursing strategic growth Credit rating service Moody’s said: “The
initiatives,” said Par Pacific’s president and CEO, acquisition benefits Par’s credit profile because
William Pate. “This acquisition expands our fully it increases scale and diversification and will be
integrated downstream network in the western funded within existing liquidity.”
United States.” Nationally, refinery profit margins have been
The refinery is a high-conversion, complex strong this year, increasing the appeal of the sale.
refinery, and it can process low-cost Western Par Pacific releases its results on November 1,
Canadian and regional Rocky Mountain crude and ExxonMobil does so on October 28.™

P6 www. NEWSBASE .com Week 43 27•October•2022