The move continues a trend of consolidation of ownership in the Canadian oilsands
“Oh, this is big,” Sayer president Tom Pavic said. “More than double what we had in the first nine months of 2024.”
“It’s continuing that trend that we saw a few years ago regarding oilsands interests, for sure, by some of the international players divesting,” Pavic said.
Markets appeared favourable to CNRL’s acquisition, with the company’s share price rising following the announcement.
“The move reflects optimism about the oilsands from one of the companies that knows it best,” said Heather Exner-Pirot, director of energy, natural resources and environment at the Macdonald-Laurier Institute, adding that CNRL has added significant production at very low risk to the company.
“Now, CNRL has an even bigger piece of a very good pie,” she said.
CNRL said it expects production from the acquired assets to average the equivalent of about 60,000 barrels of oil per day in 2025, along with about 179 million cubic feet per day of natural gas and 30,000 barrels per day of liquids.
CNRL on Monday also announced it will increase its quarterly dividend by seven per cent.
Chevron’s departure from the oilsands was not entirely unexpected since the company had previously indicated a desire to sell more than US$10-billion worth of assets during the next few years as it concentrates on growth in the Permian basin in the United States and its Tengiz field in Kazakhstan, where a US$48.5-billion expansion project is nearing completion.
“We expect Alberta’s access to Asian markets to continue to grow,” the press secretary for Alberta Energy Minister Brian Jean said in a statement. “Our premier has called on Alberta’s energy industry to increase production and we intend to do so while making the most ethical and responsibly produced oil in the world. We are confident in the long-term future of the oil sands.”
Previously, Canadian producers had to rely solely on exports to U.S. refineries, forcing steep discounts on their barrels of crude.
The Trans Mountain pipeline’s expansion allowed 28 million more barrels of crude to be shipped to the country’s West Coast from June to mid-September, almost two-thirds of which headed to China, India, South Korea and Brunei.
Oil companies, including CNRL, have largely been plowing their profits into shareholder returns rather than investing in exploration. Some analysts cautioned that the deal with Chevron could slow CNRL’s promised payouts to investors.
“Although we do not doubt the company’s ability to capture medium-term value through operational effectiveness, we do caution the return of capital profile timelines under forward strip,” Travis Wood, an analyst at National Bank of Canada, said in a note.
With files from Bloomberg News.