In the last month, Royal Dutch Shell plc and Conoco Inc. shed most of their upstream oil sands operations in the country in a pair of deals that valued their assets at just over C$30 billion. Shell sold its assets to Canadian Natural Resources Ltd. at a steep discount to replacement value, while Conoco sold its stake in a large oil sands partnership to Cenovus Energy Inc. The deals cap a recent series of deals where large international oil companies have sold interests in Canadian projects as commodity prices collapsed and environmental controls tightened.
“Alberta has always been a little bit less attractive as an investment opportunity just because of the way the oil sands are,” said Jennifer Winter, an assistant professor at the University of Calgary’s Department of Economics who specializes in energy. “Lots of capital is required and the payout is longer term, and it’s also a high-cost area.”
A study by the Fraser Institute, a right-leaning think tank in Calgary, Alberta, found that government emissions levies, aboriginal resistance and pushback from environmental groups have also diminished Canada’s appeal to foreign energy investors.
($) Shine comes off Canada’s oil sands as prices, policy push multinationals’ exit