Statoil is selling its stake in oil sands projects in the Canadian province of Alberta. As a result, the company is no longer the operator of any oil sands operations.

Statoil has signed an agreement to sell its 100% stake in the oil sands projects of Kai Kos Dehseh (KKD) in the Canadian province of Alberta.

The buyer is Athabasca Oil Corporation. The amount of sales is 832 million Canadian dollars, or 5.4 billion Norwegian crowns.

The sum includes cash consideration of C$435 million, or approximately $2.8 billion, as well as $147 million to be paid in the form of 100 million shares of Athabasca common stock.

It appears in a message sent by the company late Wednesday evening.

Controversial

The project was met with reviews from multiple quarters. According to environmental organizations, the extraction of oil sands has major negative effects on the environment, health and climate.

Several environmental organizationslike Bellona, ​​WWF and Greenpeace – but also Norwegian politicians – called on the company to withdraw from the oil sands fields.

The reason for this is that the CO2 emissions of this extraction method are higher than, for example, on the Norwegian continental shelf and the production is not sustainable.

In the press release on the sale, however, it is mainly justified by financial considerations.

The transaction covers the Leismer production demonstration plant and the undeveloped Corner project, in addition to a number of Leismer production-related contracts.

After this transaction, Athabasca will assume operating responsibility for Leismer and Corner, and Statoil will no longer be the operator of any oil sands operations.

Statoil’s shareholding, which will represent nearly 20% of Athabasca’s share capital, will be managed as a financial investment. In addition, up to C$250 million will be paid in a series of conditional payments.

Overall, approximately 80% of the consideration will be paid in cash.

The sale will take effect from the new year, but depends on regulatory approvals in Canada.

Focus on core business

– This transaction is part of Statoil’s portfolio optimization strategy to strengthen our financial flexibility and invest in our core regions globally, including offshore Newfoundland in Canada, said Lars Christian Bacher, Statoil’s executive vice president for international development and production.

– Since 2007, the Statoil organization has steadily strengthened its operations, maintained good safety and delivered strong production results to Leismer. We see Athabasca as a strong operator that is well positioned to move these assets forward.

Statoil entered the oil sands fields in Canada through the acquisition of North American Oil Sands Corporation in 2007.

In 2011, PTTEP bought a 40% share, and in 2014 Statoil and PTTEP agreed to redistribute their respective stakes in the oil sands fields. However, Statoil remained operator with a 100% stake in the Leismer and Corner projects.