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Total hints at plans to exit the oil sands, eventually

Total hints at plans to exit the oil sands, eventually

At this week's 2017 Strategy and Outlook update, French energy giant Total confirmed plans to exit Canada at some point in the future, when oil prices improve.

During Monday's conference call, CEO Patrick Pouyanne says his company is in no hurry to divest its Canadian operations, suggesting he's not likely to get a decent price under the current environment. The CEO confirmed that Total's oil sands operations have the highest breakeven prices throughout the company's entire portfolio.

Total sold a 10% stake in the Fort Hills mine to Suncor for $310 million in 2015, a relative bargain for 18,000 bbl/day of production. However, the company remains embroiled in a commercial dispute with Suncor, refusing to pay for recent cost escalations at the new $17 billion mine, where capital cost have crept closer to $90,000 per flowing barrel.

The French oil major maintains a 29.2% stake in Fort Hills, as well as a 50% stake in the Surmont SAGD facility, operated by ConocoPhillips.

UPCOMING START-UPS (COURTESY TOTAL)

AVERAGE COST PER BARREL (COURTESY TOTAL)

Ever since the downturn in oil prices, the company has been rebalancing its portfolio, divesting its "non-core" and "high breakeven resources" and buying up properties in countries with a much lower cost base, primarily in the US, Brazil, Argentina, Africa and the Middle-East. Total maintains it supports putting a price on carbon to help combat climate change, but continues to exit developed markets with more complex regulatory regimes, particularly in Europe.


SOURCES:
TOTAL • STRATEGY & OUTLOOK PRESENTATION • SEP 25, 2017
REUTERS • TOTAL IN NO HURRY TO SELL OIL SANDS ASSETS • SEP 25, 2017
OIL SANDS MAGAZINE • UNPAID BILLS AT FORT HILLS • JUL 28, 2017
Suncor's plan to stick around 100 years from now

Suncor's plan to stick around 100 years from now

Minnesota asks Enbridge: What's in it for us?

Minnesota asks Enbridge: What's in it for us?

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