The deal is for 20% stake in the Athabasca Oil Sands Project and a 70% holding in Duvernay shale
The deal relates to Chevron’s 20 per cent interest in the Athabasca Oil Sands Project and a 70 per cent holding in the Duvernay shale, both located in the Canadian province of Alberta, according to a statement from the company on Monday. 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 United States and the Tengiz field in Kazakhstan, where a US$48.5 billion expansion project is nearing completion.
Chevron is also in the process of acquiring Hess Corp. for US$53 billion, a deal that would boost its presence in the South American country of Guyana, one of the world’s exploration hot-spots.
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.