(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.

Just Posted

CrossFit Ladysmith takes part in CF24 to raise funds for Special Olympics

CF24 puts participants through 24 CrossFit workouts over 24 hours

Updated – Firefighters contain Chilco Road garage fire in Crofton

About 15 Crofton and Chemainus Fire Department members on the scene

Flyers hockey program inducted into Sports Wall of Fame

Junior B teams attracted huge crowds in the early days of Fuller Lake Arena

Northbound lanes re-open along Malahat after small rockslide near Goldstream

Drivers asked to use caution, clean-up crews have finished on-site

Nearly 80 incredible artists, one extraordinary Vancouver Island tree

Bateman gallery’s OneTree 2019 honours the life of a single, tree salvaged from the Chemainus Valley

Bye bye Bei Bei: Giant panda born in U.S. zoo heads to China

Panda heads back to China as part of cooperate breeding program

B.C.’s ‘Dr. Frankenstein of guns’ back in jail yet again for trafficking in Glock parts

Bradley Michael Friesen has parole revoked for allegedly importing gun parts yet again

B.C. woman suing after laser hair removal leaves her with ‘severe’ burns, scarring

Nadeau felt ‘far more pain’ than usual during the treatment

$2.9 million judgment in B.C. blueberry farm sabotage lawsuit

The new owners saw most of their farm ruined just as they took possession

B.C. to more than double sales tax on vaping products

Tax up from 7 to 20 per cent, tobacco tax up two cents

29 B.C. students in Hong Kong amid tense protests, university siege

Eight UVic and 21 UBC students still in Hong Kong

Site where rockslide occurred along Malahat is too narrow for rock blasting or drilling: Emcon

‘Rockfalls are inevitable, so we try to increase our response times,’ says representative

‘Midget’ no more: Sweeping division name changes coming to minor hockey in Canada

Alpha-numeric division names will be used for the 2020-2021 season and beyond

Ottawa urges CN and union to continue talks as 3,200 workers go on strike

The rail workers began their strike after failing to reach a deal by a midnight deadline

Most Read