Shell Corporation, in its major divestment project, has decided to sell off its undeveloped oil sands to the Canadian Natural Resources Ltd.
Shell has signed two agreements – under the first it will lower its shares in the Athabasca Oil Sands Project from 60 per cent to 10 per cent. Further it also announced giving up its 100 per cent share in the Peace River Complex assets which include Carmon Creek and many other oil sands in the Alberta region to Canadian Natural. Under the second agreement Shell and Canadian Natural will jointly acquire and own equally Marathon Oil Canada Corporation, which holds a 20 percent interest in AOSP, from an affiliate of Marathon Oil Corporation for $1.25 billion each, to be settled in cash.
According to a Shell official, the entire deal is amounted to $8.5 billion. The transaction process is expected to be completed by the middle of 2017. The deal is considered to be very important for the future of both the companies. Shell Corporation’s CEO Ben Van Beurden suggests that this is a welcome deal since it being highly significant as it would re-shape the company’s portfolio in the years to come.
Ben Van Beurden also sees this deal as a part of its policy of putting a cut in carbon emissions because the raw bitumen present in the oil sands reserves when extracted, has to undergo with harsh processing followed with its conversion to synthetic crude and this projects takes on high expenditure and high emission of carbon dioxide gas.
The company is also selling off a part of its oil barrel reserve. Altogether, this deal takes away the high production cost and thus helps in cutting off the debts that this Anglo-Dutch giant incurred in the recent past.