Chevron Canada to sell assets to Canadian Natural for $6.5bn

Chevron Canada said on Monday that it has agreed to sell its 20% interest in the Athabasca Oil Sands Project (AOSP) to Canadian Natural Resources for $6.5bn in cash.

The interest includes 20% of the Muskeg River and Jackpine mines, the Scotford Upgrader and the Quest Carbon Capture and Storage facility.

Canadian Natural said the deal brings its total current working interest in AOSP to 90% and adds about 62,500 barrels of oil per day of long life no decline Synthetic Crude Oil (SCO) production, contributing to "significant" sustainable free cash flow generation.

The agreement also includes the acquisition of additional various working interests in a number of other non-producing oil sands leases with aggregate acreage of about 267,000 gross/100,000 net acres.

Canadian Natural has also agreed to buy Chevron's 70% operated working interest of light crude oil and liquids rich assets in the Duvernay play in Alberta.

Scott Stauth, president of Canadian Natural, said: "These assets are a great fit for Canadian Natural and will allow us to further implement our strong operating culture and drive significant value for shareholders. We have made significant progress in driving efficiencies at AOSP over the last 7 years since the original acquisition in May 2017.

"We expect further efficiencies and improved performance going forward as a result of our relentless focus on continuous improvement. The light crude oil and liquids rich Duvernay assets fit well with our current operations in the area and will drive significant value from our area knowledge and significant experience in this type of resource play. Both acquisitions provide Canadian Natural with immediate free cash flow generation and further opportunities to drive long term shareholder value."