(The Canadian Press)

Chinese companies commit to Canadian oilsands despite setbacks, poor operating results

European and U.S. companies have cut back

While some European and U.S. companies cut their exposure to the Canadian oilsands, China’s Big Three oil giants — CNOOC, PetroChina and Sinopec — seem content to let their bets ride even if the results haven’t been spectacular.

In 2018, PetroChina produced an average of just 7,300 barrels per day of bitumen from its MacKay River thermal oilsands project, although it was designed to produce 35,000 bpd. In June, its output was about 8,700 bpd.

The Beijing-based company paid $1.9 billion in 2009 for 60 per cent interests in the proposed MacKay River and Dover oilsands projects being developed by Athabasca Oil Sands Corp. (now just Athabasca Oil Corp.), then bought out the rest of MacKay for $680 million in 2012 and Dover for $1.2 billion in 2014.

“MacKay River is located in an area with complex geology, which creates challenges to heat up the reservoir to get the bitumen flowing,” said spokesman Davis Sheremata in an emailed statement.

The company is drilling new wells and experimenting with various technologies to boost output, he said, adding a go-ahead for Dover has been put on hold until MacKay proves itself.

Still, “PetroChina Canada is committed to Canada for the long-term, having maintained its investments through economically challenging times.”

CNOOC produced about 71,000 bpd from the oilsands in 2018, little changed from 66,800 bpd in 2014, shortly after it spent $15.1 billion to buy Calgary’s Nexen Energy and its diverse portfolio of domestic and international assets.

“Our oilsands assets are an important part of our North American portfolio and we remain committed to our Canadian operations,” CNOOC spokesman Kyle Glennie wrote in a brief email.

Meanwhile, Sinopec paid $4.65 billion to buy a nine per cent stake in the Syncrude oilsands mining consortium from ConocoPhillips in 2010 and its resulting production has been steady since, registering just over 27,000 bpd in 2018.

The Chinese energy majors employ “patient capital” and it seems unlikely they will leave the oilsands anytime soon, said Jia Wang, deputy director of the China Institute at the University of Alberta.

“The assets they bought may not be the most profitable or may require more capital intensive development. … (but) these are large Chinese companies, they’re not likely to become bankrupt,” she said.

“They have been through thick and thin, and different cycles of boom and bust. These (oilsands) operations in the grand scheme of these massive companies are not the largest chunk of their business so they can afford to have a presence here without incurring too much loss.”

READ MORE: ‘Making this up:’ Study says oilsands assessments marred by weak science

Dan Healing, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

CN suspending service between Williams Lake and Squamish, effective April 3

Rail traffic north of Williams Lake will be routed to Vancouver through Prince George and Kamloops

COVID-19: Interior Health orders closure of all fitness centres until May 30

The order is subject to revision, cancellation, or extension

Cache Creek council makes decision to close pool for 2020 season

Effects of COVID-19 pandemic and delinquent taxes two factors in decision

Q&A: Interior Health CEO answers questions on COVID-19 response

Susan Brown, president and CEO of Interior Health, answers questions regarding COVID-19

VIDEO: ‘Used gloves and masks go in the garbage,’ says irked B.C. mayor

Health officials have said single-use gloves won’t do much to curb the spread of COVID-19

General exposure to public low after inmate tests positive for COVID-19: Interior Health

The Okanagan Correctional Centre inmate is receiving appropriate care

Sex workers face new risks during COVID-19 pandemic

‘Desperation has kicked in’ for vulnerable, undocumented workers unable to access help

Unclear if Cowichan couple refusing to self-isolate will face penalty

No fines or charges have been laid to date, including Cowichan couple who won’t self isolate

COVID-19: Postponed surgeries will be done, B.C. health minister says

Contract with private surgical clinic to help clear backlog

Black Press Media ad sparks discussion about value of community newspapers

White Rock resident hopes front-page note shines light on revenue loss during COVID-19 crisis

Don’t stop going to the doctor, just do it virtually: B.C. association

Doctors encourage patients to access telephone, online visits

Businesses advised to prepare for federal, B.C. COVID-19 assistance

Canada Revenue Agency portal expected to open next week

Most Read