Chevron Offloads Alberta Assets to Canadian Natural Resources

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Canadian Natural Resources Limited (NYSE:CNQ) (Calgary, Alberta) said it acquired assets from Chevron Corporation (NYSE:CVX) (San Ramon, California) that were producing some 84,000 barrels of oil equivalent production per day in Alberta for US$6.5 billion.

Chevron Canada Limited unloaded a 20% non-operating interest in the Athabasca Oil Sands Project (ASOP) and a 70% operated interest in the Duvernay shale in Alberta in an all-cash transaction effective September 1.

For Chevron, this is part of a broader effort to divest as much as $15 billion by 2028 to optimize its global portfolio. The sale comes a week after its $53 billion offer to buy out rival Hess Corporation (NYSE:HES) (New York, New York) was cleared by the U.S. Federal Trade Commission.

"We are very pleased that our merger with Chevron has cleared this significant regulatory hurdle," said Chief Executive John Hess.

Hess will not join Chevron's board due to concerns about his relationship with certain officials at the Organization of the Petroleum Exporting Countries.

For Canadian Natural Resources, the assets in ASOP adds 62,500 barrels per day (BBL/d) in heavy crude, access to some 100,000 net acres and a position in the Quest Carbon Capture and Storage facility. The acquisition of Chevron's 20% stake, meanwhile, gives Canadian Natural Resources a 90% working interest in the project.

Chevron a decade ago pushed a $4 billion expansion at the ASOP site in Fort McMurray, Alberta. The plan involved expanding the open pit operation and processing plant by 100,000 BBL/d and increasing the bitumen production capacity to 355,000 BBL/d.

Elsewhere, Canadian Natural Resources grabbed Chevron's 70% working interest in the Duvernay shale play in Alberta. That acreage is expected to average 60,000 barrels of oil equivalent per day (BOE/d).

"The light crude oil and liquids-rich Duvernay assets fit well with our current operations in the area and will drive significant value from our area knowledge and significant experience in this type of resource play," said Canadian Natural Resource President Scott Stauth.

The Canadian company averaged 1.3 million BOE/d during the first half of the year, a 4.3% increase over the same period last year.

Alberta's government, for its part, is expecting a 17% increase in crude oil production from 2022 levels to average 569,500 BBL/d by 2025.

Alberta's crude oil production supports Canada's overall position as the top oil exporter to the U.S., accounting for about 60% of total U.S. crude oil intake. Bilateral trade between Alberta and the U.S. totaled $138 billion last year, making the U.S. the largest trading partner for the province as well.

Industrial Info is tracking about $16 billion worth of capital-spending projects in Canada's Oil & Gas Production Industry that are set to begin construction in the fourth quarter, the bulk of which are in eastern Alberta. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can learn more by viewing the related project reports.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).