Koch joins Alberta oil sands bailout
for Petroleum News
The foreign based pullout from Alberta’s oil sands sector gathered even more momentum with word that giant Koch Industries has sold it assets to Calgary based Paramount Resources, notably the largest land holding in the Athabasca region.
The deal includes turning over five oil sands leases to Cavalier Energy, a unit of Paramount, the Alberta Energy Regulator reported.
Because Koch is privately held, the value of the transaction was not reported, although Paramount Chief Executive Officer Jim Riddell hinted the price was not large.
But the deal reinforces the oil sands exodus by foreign controlled companies, led by ConocoPhillips, Royal Dutch Shell, Devon Energy and Norway’s Equinor, driven by their desire to avoid endless conflicts with environmentalists and indigenous communities.
The AER approved the assets transfers on Aug. 1, almost two months after an application was filed.
Deal ends oil sands forayFor Koch, the deal brings to an end its disappointing foray into the oil sands, including its decision in 2016 to scrap plans for the C$800 million steam powered Muskwa project because of “regulatory uncertainty” and policies by the former Alberta government of Premier Rachel Notley to reduce carbon output from the oil sands.
Koch also brought to a halt in 2003 its C$3.5 billion Fort Hills mining project because of Canada’s ratification of the Kyoto Accord.
It later sold its interest, which a consortium led by Suncor Energy has turned into a C$17 billion project.
Koch was unable to attract any offers for six properties covering 220,000 net acres and holding an estimated 8 billion barrels of bitumen resources it put on the block in 2012. It later removed the assets from the market.
Paramount has created in 1976 and since acquiring Canadian assets of Apache that have lifted its output to nearly 100,000 barrels of oil equivalent per day.
It holds diverse assets in Western Canada and the Northwest Territories and is targeting a top tier position in the heart of northern Alberta’s Duvernay and Montney plays.
- GARY PARK