RE:XOM removes 98% of its Cdn tar sands from it's reservesThis news in and of itself shouldn't be surprising...most multinationals have already divested their oil sands assets since the 2014 oil crash, whether that be Shell, Equinor, ConocoPhillips or Marathon.
The main beneficiary of said divestments has largely been CNQ who has purchased a lot of assets on the cheap and has really been on an M&A tear over the past 7 years.
Fact of the matter is, the oil sands have near been more than marginal play (though an expensive one to develop), for most of the multinationals. On the other hand, the oil sands are very much central to Canadian companies such as SU, CNQ and CVE.
Whether based on reality or just perception, over the long term, the future of the entire oil and gas sector remains in question.
Oil prices have now recovered past pre-covid levels, yet the shareprices of nearly all o&g companies remain substantially lower than pre-covid levels. Time will tell if this corrects itself, or whether the investor base for o&g, particualrly institutional investors has shrunk permanently.
Marner16 wrote: "Exxon counted the equivalent of 15.2 billion barrels of reserves as of Dec. 31, down from 22.44 billion a year earlier, according to a regulatory filing on Wednesday. The company’s reserves of the dense, heavy crude extracted from Western Canada’s sandy bogs dropped by 98%."
"Among the factors that could result in portions of these amounts being recognized again as proved reserves at some point in the future are a recovery in the SEC price basis, cost reductions, operating efficiencies, and increases in planned capital spending,” Exxon said in the filing.
XOM has made it pretty clearn that unless the business environment for tar sands improves, they are no longer interested in the game. While SU has to make the tar sands work to survive, XOM has all kinds of choices to draw upon.
What does the decision mean to SU? Probably nothing in the short term but it does shed light on how SU must continue to figure out how to cut costs and produce lower GHG emmissions.