Norway’s Statoil has said it is exiting Canada’s oil sands with the sale of assets, as it continues efforts to streamline its portfolio.
The state-owned firm is selling its Kai Kos Dehseh oil sands assets to Athabasca Oil for C$832 million (US$617 million) in cash and shares, it said in a statement.
The deal, which is expected to close on January 1, 2017, is still subject to certain regulatory approvals, the company said.
The assets being sold include the producing Leismer steam-driven project and the undeveloped Corner lease, the Norwegian company said.
There are also several midstream contracts associated with its Leismer production, it added.
Statoil owns a 100% interest in the project, which is located in northern Alberta.
Following the deal, Statoil will no longer own any oil sands assets, it said.
The deal includes a C$435 million (US$323 million) cash consideration and a further C$147 million (US$109 million) that will be paid in the form of 100 million common shares in Athabasca, Statoil said. In total, around 80% of the transaction will be managed through cash.
“This transaction corresponds with Statoil’s strategy of portfolio optimisation to enhance financial flexibility and focus capital on core activities globally,” said Statoil’s executive vice president for international development and production, Lars Christian Bacher.
The core activities to be prioritised from now on include work offshore Newfoundland and Labrador, he said.
Statoil entered the oil sands business nearly 10 years ago through its acquisition of North American Oil Sands in 2007.
Thai state-run oil company PTT Exploration and Production (PTTEP) acquired a 40% interest in the Kai Kos Dehseh assets in 2011, and three years later Statoil and PTTEP agreed to divide their respective interests.
Statoil continued as the operator and 100% owner of the Leismer and Corner projects.
Statoil is not the only European firm to retreat from Canadian oil sands projects in recent years, as persistently low oil prices have made projects less economically attractive.
France’s Total also sold some of its interest in the Fort Hills project, which is still under construction, and shelved the multi-billion-dollar Joslyn project.