Shell Dumps Nearly All Canadian Tar Sands Assets Fior $7.25 Billion - Bloomberg

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(Bloomberg) -- Royal Dutch Shell Plc will sell almost all of its production assets in Canada’s oil sands in a $7.25 billion deal that cuts debt and reduces involvement in one of the most environmentally damaging forms of fossil-fuel extraction.

All of the company’s oil-sands interests apart from a 10 percent stake in the Athabasca mining project will be sold to Canadian Natural Resources Ltd., Shell said Thursday. The Hague-based company will continue as operator of the Scotford upgrader, which converts heavy oil to lighter liquids for easier transport, and the Quest carbon capture and storage project.

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Shell took a $2 billion charge in 2015 as it shelved the Carmon Creek oil-sands development and van Beurden said last month that the company wouldn’t take on any new oil-sands projects. Exxon Mobil Corp. slashed reserves in February after removing the $16 billion Kearl project from its books. A day earlier, ConocoPhillips said that erasing oil-sands barrels had reduced its reserves to a 15-year low.

Oil-sands deposits are among the costliest petroleum projects because the raw bitumen extracted must be processed and converted to a synthetic crude before being transported to refineries, mainly in the U.S. This process also emits more carbon dioxide than production of conventional crude. “It takes away some very high-cost production and will help reduce Shell’s operating costs, which were already among the highest in its group,” said Ahmed Ben Salem, a Paris-based analyst at Oddo Securities. “Oil sands was losing money and the sale will help the company focus on projects that have lower break-even prices.”

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https://www.bloombergquint.com/markets/2017/03/09/shell-agrees-to-sell-oil-sands-operations-for-7-25-billion

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