Chevron Sells Canada Oil Sand, Shale Assets for $6.5 Billion
[Stay on top of transportation news: Get TTNews in your inbox.]
Chevron Corp. agreed to sell its stakes in some oil sands and shale assets to Canadian Natural Resources Ltd. for $6.5 billion.
The deal relates to Chevron’s 20% interest in the Athabasca Oil Sands Project and a 70% holding in the Duvernay shale, both located in the Canadian province of Alberta, according to a statement from the company Oct. 7. The all-cash transaction has an effective date of Sept. 1 and is expected to close during the fourth quarter, subject to regulatory approvals.
The asset sale comes as Chevron focuses its growth plans increasingly in other parts of the world, notably the Permian basin in the U.S. and the Tengiz field in Kazakhstan, where a $48.5 billion expansion project is nearing completion.
Chevron is also in the process of acquiring Hess Corp. for $53 billion, a deal that would boost its presence in the South American country of Guyana, one of the world’s exploration hot spots.
Canada’s oil sands have been in production for decades but the industry is undergoing a significant change since completing the expansion of the Trans Mountain pipeline, which opened Asian markets for the country’s crude.
Previously, the Canadian oil industry was dependent on U.S.-bound pipelines and American refiners, resulting in deeper discounts for its crude and leaving it vulnerable to price shocks. From June to mid-September, the pipeline expansion had allowed the shipment of 28 million more barrels of crude to the country’s west coast, almost two-thirds of which headed to China, India, South Korea and Brunei.
Want more news? Listen to today's daily briefing below or go here for more info:
