Shell closes sale of oil sands assets in Canada

Royal Dutch Shell has completed the previously announced agreements to sell all its in-situ and undeveloped oil sands interests in Canada, through its subsidiaries Shell Canada Energy, Shell Canada and Shell Canada Resources.

As part of the sale, the company also reduced its share in the Athabasca Oil Sands Project (AOSP) from 60% to 10%.

Under the first agreement, Shell has closed the divestment of its assets, including 60% interest in AOSP, 100% interest in the Peace River Complex in-situ assets, including Carmon Creek, and several undeveloped oil sands leases in Alberta, Canada.

The assets were sold to a subsidiary of Canadian Natural Resources for $8.2bn, comprising $5.3bn in cash and a stock option of around 98 million Canadian Natural shares currently valued at $2.9bn.

Shell intends to manage its share position in Canadian Natural for value realisation over time.

Under a separate agreement, Shell and Canadian Natural have completed the joint acquisition to equally own Marathon Oil Canada (MOCC) from an affiliate of Marathon Oil for $1.25bn each. 

MOCC holds a 20% interest in AOSP, which includes the Scotford upgrader and Quest CCS project north-east of Edmonton.

Canadian Natural will operate the AOSP upstream mining assets, while Shell will continue to operate the Scotford project.

Notwithstanding the completion of the transactions, Shell will retain operations in Canada, including, upstream shales, with large acreage positions in the Duvernay and Montney formations.

Other operations include refining and marketing; and integrated gas with the proposed LNG Canada project.