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Chevron to Sell Assets for $6.5 Billion to Canadian Natural Resources

A Chevron gas station sign is seen in Austin, Texas, US, October 23, 2023. REUTERS/Brian Snyder/File Photo
A Chevron gas station sign is seen in Austin, Texas, US, October 23, 2023. REUTERS/Brian Snyder/File Photo
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Chevron to Sell Assets for $6.5 Billion to Canadian Natural Resources

A Chevron gas station sign is seen in Austin, Texas, US, October 23, 2023. REUTERS/Brian Snyder/File Photo
A Chevron gas station sign is seen in Austin, Texas, US, October 23, 2023. REUTERS/Brian Snyder/File Photo

Chevron is selling its assets in the Athabasca oil sands and Duvernay shale formation to Canadian Natural Resources for $6.5 billion, the oil giant said on Monday as it puts in motion its divestiture plan.

The all-cash transaction, which is expected to close in the fourth quarter, is a part of its strategy to divest $10 billion to $15 billion of assets by 2028.

The assets, located in Alberta, Canada, contributed 84,000 barrels of oil equivalent per day (boepd) of production to Chevron in 2023.

The deal relates to Chevron’s 20% interest in the Athabasca Oil Sands Project and a 70% holding in the Duvernay shale, both in the province of Alberta, according to a statement from the company on Monday.

After the deal, Canadian Natural will own 90% of the Athabasca Oil Sands project, while Shell owns the rest.

Canadian Natural has a long-term debt of 9.33 billion Canadian dollars ($6.9 billion).

The Duvernay is one of Canada's top shale plays and has seen eight deals worth $2.9 billion in the last three years, Wood Mackenzie said in January.

Chevron, meanwhile, is looking to spend more than 75% of its production budget on US shale basins, the Gulf of Mexico, the Eastern Mediterranean, Guyana, Australia and Kazakhstan.

Shares of Chevron were up 1.1% before the bell on Monday driven by a higher oil-price environment and this deal.

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BP Abandons Goal to Cut Oil Output, Resets Strategy

The ogo of British Petrol BP is seen at a petrol station in Pienkow, Poland, June 8, 2022 (Reuters)
The ogo of British Petrol BP is seen at a petrol station in Pienkow, Poland, June 8, 2022 (Reuters)
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BP Abandons Goal to Cut Oil Output, Resets Strategy

The ogo of British Petrol BP is seen at a petrol station in Pienkow, Poland, June 8, 2022 (Reuters)
The ogo of British Petrol BP is seen at a petrol station in Pienkow, Poland, June 8, 2022 (Reuters)

BP has abandoned a target to cut oil and gas output by 2030 as CEO Murray Auchincloss scales back the firm's energy transition strategy to regain investor confidence, three sources with knowledge of the matter said.

When unveiled in 2020, BP's strategy was the sector's most ambitious with a pledge to cut output by 40% while rapidly growing renewables by 2030.

BP scaled back the target in February last year to a 25% reduction, which would leave it producing 2 million barrels per day at the end of the decade, as investors focused on near-term returns rather than the energy transition.

The London-listed company is now targeting several new investments in the Middle East and the Gulf of Mexico to boost its oil and gas output, the sources told Reuters.

Auchincloss took the helm in January but has struggled to stem the drop in BP's share price, which has underperformed its rivals so far this year as investors question the company's ability to generate profits under its current strategy.

The company continues to target net zero emissions by 2050.

“As Murray said at the start of year... the direction is the same – but we are going to deliver as a simpler, more focused, and higher value company,” a BP spokesperson said.

Auchincloss will present his updated strategy though in practice BP has already abandoned it, the sources said. It is unclear if BP will provide new production guidance.

Back to the Middle East, the sources said BP is currently in talks to invest in three new projects in Iraq, including one in the Majnoon field.

BP holds a 50% stake in a joint venture operating the giant Rumaila oilfield in the south of the country, where it has been operating for a century.

In August, BP signed an agreement with the Iraqi government to develop and explore the Kirkuk oilfield in the north of the country, which will also include building power plants and solar capacity.

Unlike historic contracts which offered foreign companies razor-thin margins, the new agreements are expected to include a more generous profit-sharing model, sources have told Reuters.

BP is also considering investing in the re-development of fields in Kuwait, the sources added.

In the Gulf of Mexico, BP has announced it will go ahead with the development of Kaskida, a large and complex reservoir, and the company also plans to green light the development of the Tiber field.

It will also weigh acquiring assets in the prolific Permian shale basin to expand its existing US onshore business, the sources said.