Another oil major looks to join the "divest-Canada" movement
Reuters is reporting this week that Chevron is looking to sell its 20% stake in the Athabasca Oil Sands Project (AOSP), which includes the Albian Sands mining operation (both the Muskeg River and Jackpine mines) and the Scotford upgrader near Edmonton, AB.
Canadian Natural Resources (CNRL) recently purchased a big chunk of AOSP from Shell and Marathon Oil for US$11 billion. Once the transaction is completed, CNRL will own 70% of AOSP, making it a logical buyer for Chevron's 20% share. Chevron has reportedly engaged several investment banks to find a buyer for the oil sands assets, estimated to be worth US$2.5 billion.
Anonymous sources cite unfavourable economic competitiveness as a reason for the sale. Despite the addition of new carbon taxes, higher income taxes and added regulatory hurdles, both the federal and provincial governments so far have refused to acknowledge any competitive disadvantage for Canada's energy sector.
Chevron also put its Vancouver refinery and retail gas stations up for sale last year, but has yet to announce a buyer.
If successful, Chevron would join Statoil, Marathon Oil, ConocoPhillips and Shell on the list of international oil majors divesting significant Canadian assets. Alberta Premier Rachel Notley calls the asset sales a "reorganization" of the Canadian energy sector and not a withdrawal of capital.
Chevron posted an annual loss of almost US$500 million last year, the first since since 1987. The company is hoping to sell up to US$10 billion in assets by the end of 2017.