Canadian Natural Completes Purchase of Chevron Oil Sands, Duvernay Assets

Canadian Natural Resources Ltd. has completed a transaction to acquire Chevron Corp.’s stakes in producing and undeveloped oil sand, liquid and natural gas properties in Alberta province for $6.5 billion in cash.

The transaction, part of the United States energy giant’s plan to raise $10 billion to $15 billion from asset sales by 2028, consisted mainly of Chevron’s 20 percent interest in the Athabasca Oil Sands Project (AOSP) and 70 percent stake in the Duvernay play.

It also included stakes in several other non-producing oil sands leases with aggregate acreage of about 100,000 net acres.

The AOSP portion, which includes the Muskeg River and Jackpine mines, the Scotford Upgrader and the Quest Carbon Capture and Storage facility, has raised operator Canadian Natural’s stake to 90 percent. Shell PLC holds the remaining 10 percent.

“The Company targets 2025 production from these acquired assets to be approximately 122,500 BOE/d [barrels of oil equivalent a day], consisting of 62,500 bbl/d of long-life, no-decline Synthetic Crude Oil at AOSP and approximately 60,000 BOE/d from the Duvernay, comprised of 179 MMcf/d [million cubic feet per day] of natural gas and 30,000 bbl/d of liquids”, Canadian Natural said in a statement announcing the closure of the transaction.

“Both acquisitions provide Canadian Natural with immediate free cash flow generation and further opportunities to drive long-term shareholder value”.

Affected workers have transferred to Canadian Natural as part of the deal.

In the announcement of the agreement October 7, Canadian Natural president Scott Stauth said, “The light crude oil- and liquids-rich Duvernay assets fit well with our current operations in the area and will drive significant value from our area knowledge and significant experience in this type of resource play”.

Knowledge of the mines “eliminates the risks associated with a brownfield or greenfield project”, added Canadian Natural chief financial officer Mark Stainthorpe.

In Duvernay, “[t]here are greater than 340 net light crude oil and liquids-rich locations already identified with extensive infrastructure and available processing capacity, which depending on capital allocation, has a defined plan with potential to grow to 70,000 BOE/d by 2027”, Canadian Natural said then.

The non-producing portion of the transaction involved Ells River, Pierre River, Namur and Saleski, where Canadian Natural is already a participant. Canadian Natural’s stakes in Ells River, Pierre River, Saleski and Namur — all in Alberta — have now increased to 90 percent, 90 percent, 83 percent and 65 percent respectively.

Chevron said at the time, “This transaction progresses Chevron’s previously announced plans to divest $10–15 billion in assets by 2028 to optimize its global energy portfolio”.

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