(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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Sternwheelers once plied Okanagan Lake

Vessels once transported passengers and goods along the Okanagan Valley

Fires ignite on Revelstoke’s Mt. Begbie; Kamloops Fire Centre blazes holding

Crews working throughout region over holiday weekend to contain wildfires

QUIZ: How much do you know about British Columbia?

On this B.C. Day long weekend, put your knowledge of our province to the test

Solco Creek fire east of Okanagan Falls grows to nearly 14 hectares

Both fires were under two hectares in size as of Thursday night, neither threatening structures

VIDEO: Otter pups learn to swim at B.C. wildlife rescue facility

Watch Critter Care’s Nathan Wagstaffe help seven young otters go for their first dip

Police watchdog investigates Kamloops RCMP after stabbing death

The IIO is investigating the police’s lack of success in locating the man charged in stabbing

Forty-three properties near Dry Lake, along Highway 5A, under evacuation alert

Wildfire has been burning out of control north of Princeton for two days

Wildfire near Merritt creates smoke for drivers on Coquihalla

Coldwater River fire was estimated at seven hectares Aug. 3 and classified as out of control

Thompson Okanagan Tourist Association: Who can’t access your business?

TOTA launches video to encourage proprietors to remove barriers

Shuswap pet nutritionist, raw diet advocate to be featured in national magazine

Sicamous-based Deanna Larocque building reputation for canine support

BC RCMP notify IIO BC of incident involving police dog in Kelowna

A suspect and a police dog were taken to receive medical treatment after an incident on Aug. 1.

Alberta man presumed to have drowned after cliff jumping in Peachland

Emergency responders began rescue efforts at around 2:40 p.m. on Aug. 1.

Most Read