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Canada’s Costly Oilsands Loses Another Player as Norwegian Oil Giant Statoil Pulls Out

Norwegian oil major Statoil will be pulling out of its Canadian oilsands project after nearly a decade with an expected loss of at least USD$500 million.

In yet another sign that Canada’s oilsands – one of the most polluting fossil fuel projects on the planet – is becoming increasingly costly, Lars Christian Bacher, Statoil’s executive vice-president for international development and production, said in a statement: “This transaction corresponds with Statoil’s strategy of portfolio optimisation to enhance financial flexibility and focus capital on core activities globally.”

The 14 December announcement comes just weeks after Prime Minister Justin Trudeau approved the controversial Kinder Morgan Trans Mountain pipeline and the Enbridge Line 3 pipeline in a move to facilitate growth in the oilsands and create jobs.

The international energy giant will sell all of its oilsands assets to the mid-sized Alberta-based Athabasca Oil Corp effective 1 January 2017 in a deal that could produce about 80,000 barrels of oil a day with reserves expected to last up to 70 years. It is estimated to be worth up to CAD$832 million. The deal will also see Statoil retain a stake of just under 20 percent in Athabasca.

Statoil was one of 13 companies operating in the oilsands that had signed a long-term contract with Texas-based pipeline operator Kinder Morgan to ship oil via the Trans Mountain pipeline. However, it is now unclear what will happen with its contract, the National Observer has reported. According to Statoil Athabasca will have the option to enter the agreement.

The move is the latest in a string of losses for oilsands operators since global oil prices began to plummet in 2014, triggering other European companies such as Shell and Total to pull out of projects and resulting in tens of thousands of jobs being lost across Alberta.

And while Trudeau has said recently that tar sands and pipeline expansion will be “integral” to the country’s climate plans, Statoil’s head of sustainability, Bjorn Otto Sverdrup, tweeted on the day of the company’s announcement that Statoil’s exit from the oilsands “bends our cost and emission curves. Building resilience.”
 

Photo: Lawrence Sauter via Statoil

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Like a kid in a candy store
When those boxes of heavily redacted documents start to pile in, reporters at The Narwhal waste no time in looking for kernels of news that matter the most. Just ask our Prairies reporter Drew Anderson, who gleefully scanned through freedom of information files like a kid in a candy store, leading to pretty damning revelations in Alberta. Long story short: the government wasn’t being forthright when it claimed its pause on new renewable energy projects wasn’t political. Just like that, our small team was again leading the charge on a pretty big story

In an oil-rich province like Alberta, that kind of reporting is crucial. But look at our investigative work on TC Energy’s Coastal GasLink pipeline to the west, or our Greenbelt reporting out in Ontario. They all highlight one thing: those with power over our shared natural world don’t want you to know how — or why — they call the shots. And we try to disrupt that.

Our journalism is powered by people just like you. We never take corporate ad dollars, or put this public-interest information behind a paywall. Will you join the pod of Narwhals that make a difference by helping us uncover some of the most important stories of our time?

If Canada wants to be an international biodiversity leader, it has to start at home

Rodrigo Estrada Patiño is program director at Greenpeace Canada. Stephen Hazell is president of Ecovision Law and was executive director of both Sierra Club Canada...

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