(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

Vandals cause damage estimated at $3,000

“It was just malicious, stupid, drunken behaviour” - Thwaites

Confusion surrounds terms of RCMP withdrawal from pipeline construction area

B.C. Deputy Commissioner clarifies terms of agreement following minister’s statements

Stop checks, searches of Wet’suwet’en pipeline opposers unlawful: Watchdog

Wet’suwet’en hereditary chiefs, the B.C. Civil Liberties Association, Union of B.C. Indian Chiefs file complaint

Wet’suwet’en pipeline supporters speak up

“Protesters get one side of the story and they stand up with their fists in the air.”

Bachrach rejects calls for police action against demonstrators

Skeena-Bulkley Valley MP says only way out of crisis is “true nation-to-nation” talks

VIDEO: B.C. senior recalls ‘crazy’ wartime decision to grab bear cub from den

Henry Martens – now 96 – says he was lucky to be alive after youthful decision to enter a bear’s den

Cheapest in B.C.: Penticton gas prices dip below $1 per litre

Two stores in Penticton have gas below a dollar.

Loans or gifts? Judge rules woman must pay B.C. man back $7K

B.C. judge rules that woman must pay back more than $7,000 in advanced funds to man

VIDEO: Outpouring of worldwide support for bullied Australian boy

Australian actor Hugh Jackman said ‘you are stronger than you know, mate’

‘A horror show:’ Ex-employee shares experience at problematic Chilliwack seniors’ home

Workers are paid below industry standard at all Retirement Concepts facilities

Forest industry protests northern B.C. caribou protection deal

B.C. Mining Association supports federal-Indigenous plan

Youth-led report calls on B.C. government to create plan to end youth homelessness

There are no dedicated programs for youth homelessness at federal, provincial level, report says

Trudeau: Time for blockades to end and Indigenous leaders to work with government

Prime minister says situation in Coastal GasLink pipeline dispute is ‘unacceptable and untenable’

Petition slams Victoria councillor who chastised police after Wetsuweten protest

Ben Isitt calls effort to get him suspended is not a ‘reliable barometer of public opinion’

Most Read