Shell shrinks Canada oil sands footprint

Canada

THE HAGUE, March 9, 2017 – Shell has reached agreements with Canadian Natural Resources on the sale of its in-situ oil sands assets, along with undeveloped leases, the Anglo-Dutch major said on Thursday.

Valued at USD 7.25 billion, the deals will see Shell sell its 100% ownership stake in the Peace River Complex in-situ assets. Additionally, the company will reduce its shareholding in the Athabasca Oil Sands Project from 60% to 10%.

The 10% stake will be held through a shareholding in Marathon Oil Canada Corporation, which Shell jointly acquired with Canadian Natural in a second, separate transaction.

Shell will maintain its operatorship of the Scotford upgrader and Quest Carbon Capture and Storage project, as well as the nearby refinery and petrochemicals facilities.

“This announcement is a significant step in re-shaping Shell’s portfolio in line with our long-term strategy. 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,” Chief Executive Ben van Beurden said in comments on the transactions, adding that they would contribute to the company’s ongoing USD 30-billion divestment effort.

Shell Canada President and Country Chair Michael Crothers, in separate comments, said the company was committed to the local market.

“Shell has been in Canada for more than 100 years and we plan to continue our presence as one of the country’s largest integrated energy companies. We are enhancing returns in our important Downstream business and leveraging our world-class manufacturing capabilities through the integration opportunities that come with continuing to operate the Scotford upgrader and Quest CCS project, located next to the Shell Scotford refinery and chemicals plants,” he was quoted as saying.