| CALGARY, Alberta, April 28
CALGARY, Alberta, April 28 As global oil majors
pull out of Canada's oil sands, domestic companies are buying up
assets and betting technology and economies of scale will enable
them to turn a profit despite low crude prices.
Global energy majors have sold off more than $22.5 billion
worth of Canadian oil sands assets so far this year, concerned
about depressed oil prices, high production costs and carbon
emissions and limited pipeline access to market.
Three of Canada's biggest oil and gas companies reported
first-quarter earnings and held annual general meetings this
week, in which they talked up opportunities in the region
despite global firms pulling back.
"We are transforming our company at a pivotal time in the
industry and at the beginning of a technological renaissance,"
Cenovus Energy Inc Chief Executive Officer Brian
Ferguson told investors on Wednesday.
Cenovus last month announced a C$17.7 billion ($12.98
billion) deal to buy ConocoPhillips assets, doubling the
size of the Canadian company. The market baulked at the
ambitious acquisition and Cenovus stock lost a fifth of its
value, but Ferguson insists the logic behind the deal is sound.
He predicts 2016 to 2020 will be period in which rapid
technology development in areas including drilling,
solvent-assisted bitumen extraction and automation will result
in massive cost savings.
Suncor Energy Inc CEO Steve Williams said the sector
consolidation was very positive for the industry and Canada.
"The oil sands business needs focused operators with strong
balance sheets and deep expertise," Williams said on an earnings
call. "We expect the transition to more concentrated oil sands
leaders to enable regional synergies and technology development
that will drive the sector forward and ensure its global
competitiveness for decades to come."
Suncor, Canada's largest energy company, bought a
majority-share in the Syncrude mining and upgrading project last
The facility cut production after a fire in March but
Suncor's main oil sands plant nearby has helped manage
Syncrude's bitumen inventories during the outage, a move that
Williams said was a good example of how to leverage expanded
Imperial Oil Ltd, majority-owned by Exxon Mobil
Corp, has so far held back from buying up any oil sands
assets, but CEO Rich Kruger said Canada's vast bitumen reserves
were an incredible resource with improving economic and
"Our industry has shown we have an ability to make things
better and better over time, so don't bet against the Canadian
oil sands," he said.
(Editing by Lisa Shumaker)