Royal Dutch Shell said Wednesday it completed the $9.45 billion sale via three Canadian units and two deals of all its Canadian in-situ (in-ground) and undeveloped oil sands assets interests, and reducing its share in the Athabasca Oil Sands Project (AOSP) from 60% to 10%.
Under the first agreement, Shell completed the $8.2 billion sale to a subsidiary of Canadian Natural Resources Ltd. its entire 60% interest in AOSP, its 100% interest in the Peace River Complex in-situ assets, and a number of undeveloped oil sands leases in Alberta, Canada.
The consideration to Shell from Canadian Natural includes $5.3 billion in cash plus roughly 98 million Canadian Natural shares, currently valued at $2.9 billion. Shell’s share position in Canadian Natural will be managed for “value realization” over time, Kallanish Energy finds.
Under the second agreement, Shell and Canadian Natural completed the joint acquisition and now own equally Marathon Oil Canada Corp. (MOCC), which holds a 20% interest in AOSP, from an affiliate of Marathon Oil, each paying $1.25 billion.
As previously announced, the transactions were estimated to result in a post-tax impairment of $1.3 to $1.5 billion, of which $1.1 billion was taken in Q1, 2017 with a further $0.4 billion expected in Q2 based on final closing adjustments.
Effective today, Canadian Natural will operate the AOSP upstream mining assets, while Shell will continue as operator of the Scotford upgrader and Quest carbon capture and storage (CCS) project, located next to the 100% Shell affiliate-owned Scotford refinery and chemicals plants.
AOSP is now a joint venture between Canadian Natural Upgrading Ltd. (60%), Chevron Canada Ltd. (20%), and Marathon Oil Canada (20%, which is owned 50% by a Shell affiliate and 50% by Canadian Natural).
