NORWAY’S state energy major Statoil has agreed to exit the oil sands sector, at a loss of at least US$500m.
Statoil is selling its 100% stake in the Kai Kos Dehseh (KKD) oil sands project in Alberta, Canada to Athabasca Oil for C$832m (US$622m). The deal ends Statoil’s nine-year venture in the oil sands sector, and follows its decision in 2014 to shelve KKD’s Corner project, blaming rising construction costs and concerns over delays to pipelines needed to transport product.
The oil sands sector has been particularly affected by the ongoing slump in oil prices, as operating costs to produce and process the thick deposits are among the highest per barrel of oil.
The KKD asset includes the Leismar demonstration plant, with a licensed capacity of 20,000 bbl/d, and the undeveloped Corner project, which is licensed to produce up to 40,000 bbl/d.
Lars Christian Bacher, Statoil’s executive vice-president for development & production international said the sale follows the company’s strategy to invest instead in core activities, including offshore deposits in Newfoundland, Canada.
“We consider Athabasca a prudent operator and very well placed to take these assets forward,” he added.
Statoil says the sale, which is expected to close on 1 January 2017, will trigger an impairment charge of US$500m to US$550m.
Statoil’s exit follows Shell’s decision to cancel its Carmon Creek oil sands project due to a shortage of pipeline capacity last year.
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