Statoil sells its stake in tar sands projects in the Canadian province of Alberta. As a result, the company no longer operates any oil sands operations.

Statoil has signed an agreement to sell its 100 percent stake in the Kai Kos Dehseh (KKD) oil sands projects in the Canadian province of Alberta.

The buyer is Athabasca Oil Corporatio. The amount of sales amounts to 832 million Canadian dollars, or 5.4 billion Norwegian crowns.

The sum includes a cash consideration of 435 million Canadian dollars, or approximately 2.8 billion, as well as $147 million to be paid in the form of 100 million common shares of Athabasca.

It appears in a message sent by the company late Wednesday evening.

Controversial

The project has been criticized from several sides. According to environmental organizations, tar sands extraction has major negative effects on the environment, health and climate.

A number of environmental organizationslike Bellona, ​​​​the WWF and Greenpeace – but also Norwegian politicians – have called on the company to withdraw from the tar sands fields.

The reason is that CO2 emissions from this extraction method are higher than, for example, on the Norwegian continental shelf and the production is not sustainable.

In the press release on the sale, however, it is primarily justified by financial considerations.

The transaction covers the Leismer Production Demonstration Plant and the undeveloped Corner Project, in addition to a number of contracts related to Leismer production.

Following this transaction, Athabasca will assume responsibility as operator of Leismer and Corner, and Statoil will no longer be the operator of any oil sands operations.

Statoil’s stake, which will represent nearly 20 per cent of Athabasca’s share capital, will be managed as a financial investment. Additionally, up to C$250 million will be delivered in a series of conditional payments.

In total, approximately 80 percent of the consideration will be paid in cash.

The sale will take effect from the new year, but is dependent on regulatory approvals in Canada.

Focus on your core business

– This transaction is part of Statoil’s portfolio optimization strategy to strengthen our financial flexibility and invest in our core areas globally, including offshore Newfoundland in Canada, said Lars Christian Bacher, Statoil Executive Vice President for International Development and Production.

– Since 2007, the Statoil organization has steadily strengthened its operations, maintained good safety and achieved strong production results from Leismer. We view Athabasca as a strong operator well positioned to advance these assets.

Statoil entered the oil sands fields in Canada through the acquisition of North American Oil Sands Corporation in 2007.

In 2011, PTTEP purchased a 40 percent stake and in 2014, Statoil and PTTEP agreed to the redistribution of their respective stakes in the oil sands fields. However, Statoil remained operator with a 100 percent interest in the Leismer and Corner projects.