Big Oil abandons oil sands – Canadian companies step in

By |2019-05-08T19:42:10+01:00Monday, 21 January 2019|Categories: oil industry, oil sands|Tags: , |0 Comments

With the notable exception of ExxonMobil, oil majors are leaving the Canadian oil sands sector. They are replaced by Canadian oil companies. 

Imperial Oil, majority owned by ExxonMobil, recently declared it would continue its US$2 billion Aspen project in Alberta. In contrast, Shell and ConocoPhillips are selling their oil-sands assets. Other majors may follow. The reasons are manifold:

  • An increasing number of important institutional investors shareholders shun carbon-intensive oil sands exposure as much as coal. 
  • Moreover, multi-decade oil sands projects are in contrast to a more flexible and more diversified investment approach which is the “strategy du jour” in board rooms these days. Short-term shale projects, diversification into gas, or even offshore wind, meet off-risk demands in a better way.
  • The main problem, however, for all oil sands operators is logistics. The existing pipeline capacity to consumer areas is exhausted. Rail, barge and even truck transport are used but at a considerable cost and with limited capacity. 

When transport bottlenecks pressed most Canadian crude prices to just 13 $/b politics stepped in. Large Producers such as […]