Total continues its retreat from the oil sands
Canadian Natural Resources has agreed to purchase the Joslyn oil sands project from French energy major Total for $225 million in cash. CNRL has agreed to pay $100 million up front, with $25 million to be paid annually over the next 5 years.
The Joslyn lease is located directly south of CNRL's Horizon Mine. The company did not disclose development timelines for Joslyn but says the purchase "will allow for more effective lease-line development opportunities" between the two mines.
Total purchased Joslyn from Deer Creek in 2005. The company shelved plans to develop the lease in 2014, after oil prices began free-falling and capital costs ballooned to $11 billion.
The Paris-based producer was recently involved in a scuffle with Suncor Energy over cost overruns at its newly minted Fort Hills mine. The company sold a 10% stake in Fort Hills to Suncor back in 2015 and divested another 3% stake earlier this year to settle unpaid bills at the oil sands mine. Total still has a 26% stake in Fort Hills and a 50% stake in the Surmont SAGD facility, operated by JV partner ConocoPhillips. The company has repeatedly expressed desires to exit its oil sands operations, reported to be among the least economically-viable assets in its portfolio.
CNRL expects this latest transaction to close at the end of September.