Canadian rivals, including Fort Hills’s controlling shareholder, Suncor Energy Inc., plan to meet their net-zero goals by reducing greenhouse-gas emissions from their oil sands properties. Their capital spending is around initiatives such as carbon capture and storage, and scale matters on these multibillion-dollar projects.
In its public statements, Total says its exit strategy consists of spinning out all its Canadian holdings – oil sands projects, pipelines and trading operations – in a new, Toronto Stock Exchange-listed public company. The French company would continue to hold a minority stake in the business. Total shareholders are expected to vote on the concept in May.
In private conversations, investment bankers say Total’s simplest and potentially most profitable path forward is selling its Alberta holdings to Suncor. However, to create tension in the sales process, and meet past promises on divesting oil sands properties, the French company is moving forward with the spin out.
There was a time – as recently as 2010 – when initial public offerings from pure play oil sands companies such as MEG Energy Corp. drew rave reviews from investors. Those days are long past.
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