Blockbuster $8.8-billion Chevron deal further consolidates Canadian control over oilsands
Canadian Natural Resources Ltd. (CNRL) has made a significant move by acquiring assets from Chevron in an $8.8-billion deal, further consolidating its position in Canada’s oilsands. This substantial acquisition has granted CNRL an even larger share of a highly valuable sector within the oil industry. The production from these acquired assets is expected to average approximately 60,000 barrels of oil per day by 2025, accompanied by around 179 million cubic feet per day of natural gas and 30,000 barrels per day of liquids.
The Calgary-based CNRL is financing this major transaction through a substantial US$4-billion term loan acquired from the Bank of Nova Scotia and Royal Bank of Canada. This all-cash deal, effective from September 1, is anticipated to conclude during the fourth quarter, pending regulatory endorsement.
With this strategic acquisition, CNRL has also announced a seven percent increase in its quarterly dividend. This development reflects confidence in the financial health and future prospects of the company.
The decision by Chevron to exit the oilsands was not entirely unforeseen. The company had previously expressed its intention to sell off more than US$10-billion worth of assets over the coming years. This move comes as Chevron focuses its attention on expanding growth prospects in the Permian basin in the United States and the Tengiz field in Kazakhstan, which is nearing the completion of an ambitious US$48.5-billion expansion project.
In recent years, there has been a noticeable trend of international energy companies withdrawing from Canada’s oilsands sector. This has been attributed to the region’s costly and emissions-intensive nature, leading to concerns about the long-term viability of Canadian heavy oil exports. Despite these concerns, the sector experienced a significant boost last spring with the completion of the Trans Mountain pipeline expansion, enabling Canadian crude to reach Asian markets.
This deal marks another chapter in the evolving landscape of Canada’s oilsands, as Canadian companies like CNRL strengthen their grip on the industry. The consolidation is expected to influence the future trajectory of oil production and exportation from Canada, affecting both domestic and international markets.
