Shanon Stubbs is dissapointed with Shell’s massive sell off of Oil sands assets to CNRL.
“Unfortunately, it’s just the latest in a list of other multinational companies who have either divested or frozen their investments in the oil sands recently,” the Lakeland MP and and Official Opposition Deputy Critic for Natural Resources said in a statement. “This announcement follows on the heels of other departures like ExxonMobil, Statoil and ConocoPhillips. Regulator uncertainty, increased costs and anti-energy policies by both provincial and federal governments are driving away investment.”
Shell had been planning to sell off the majority of its oilsands assets for over a year, CEO Ben van Beurden said at the CERAWeek energy conference in Houston.
“We said we would high-grade the portfolio. We would get out of positions where we do not have the scale or the capability, or that did not fit us in the longer run strategically. And the oilsands is one of them.”
The company has been advocating in favour of carbon taxes publicly and has also announced at the conference that they will change their pay program to include incentives for reducing emissions.
However, Stubbs feels the carbon tax might have had more of an impact than Shell would let on.
“The Prime Minister is forcing a carbon tax on every person in every community in the country that is detrimental to Canadian oil and gas development. Neither the US nor any of the other top 6 oil and gas producing countries in the world are proposing or imposing a carbon tax on themselves because they know it will undermine their competitiveness. The oil sands are already capital intensive, long term projects, which is particularly challenging in the context of President Trump planning to develop their domestic energy, aggressively reduce corporate taxes, regulations and red tape significantly, which is already underway. This is an acute problem for Canada because the U.S. is both our biggest customer and biggest competitor.
“Multinationals can, and will, choose lower cost environments to invest and develop energy resources around the world, so they may appear to supportgovernment policy or praise government announcements, but the proof is in where they put their capital and they are speaking their truth loud and clear: taking investment away.Hours following the announced sale, Prime Minister Trudeau received the Global Energy and Environmental Leadership Award at the conference.”
Canadian Natural Resources Limited plans to spend $12.74 billion in cash and shares on this deal. Shell has also agreed to sell its Peace River Thermal oil sands assets, including its shelved Carmon Creek project, and undeveloped oil sands leases to Canadian Natural.
“Personally, I was happy to see the purchase done by an experienced, Canadian company like CNRL, which provides hundreds of reliable, good paying jobs for people in Lakeland and throughout North America. But, the trend towards fewer developers of this important, strategic asset that drives prosperity for all Alberta and Canada is troubling.”
The final sale is expected to close in mid-2017, subject to regulatory approvals.
Shell continues to have some business in Canada. It still operates the Scotford Refinery and carbon capture and storage plant northeast of Edmonton. It also has a 10 per cent stake in its original oilsands mines.