One of the biggest players in the international oil game is practically pulling out Canadian oil.
Shell announced Thursday that it will sell all of its original and undeveloped oil sands interests in Canada and reduce its share in the Athabasca Oil Sands Project (AOSP) from 60% to 10%.
Shell will sell their properties to Canadian Natural Resources Limited including the entire 60% interest in AOSP, 100% interest in the Peace River Complex assets, including Carmon Creek, and a number of undeveloped oil sands leases in Alberta. Shell will receive $7.25 billion for the sale.
“This announcement is a significant step in re-shaping Shell’s portfolio in line with our long-term strategy,” said CEO Ben van Beurden. “We are strengthening Shell’s world-class investment case by focusing on free cash flow and higher returns on capital, and prioritising businesses where we have global scale and a competitive advantage such as Integrated Gas and deep water.
“The proceeds will accelerate free cash flow and reduce gearing and make a meaningful contribution to Shell’s $30 billion divestment programme.”
Shell has been in Canada for more than 100 years and the company said it will remain in operation in the country in other aspects.
Their remaining operation in Canada includes Upstream shales, with a large Duvernay and Montney acreage position, Downstream through chemicals, refining and marketing, and in Integrated Gas with the proposed LNG Canada project.
Before this announcement, the Athabasca Oil Sands Project (AOSP) was a joint venture between Shell Canada Energy , Chevron Canada Limited (20 percent) and Marathon Oil Canada Corporation (20 percent).
The Peace River Complex includes facilities at Peace River, Carmon Creek and Cliffdale which produced about 14,800 barrels per day in 2016.
