Total writes off $9.3B in oilsands assets, cancels Canadian oil lobby membership

Total writes off $9.3B in oilsands assets, cancels Canadian oil lobby membership

CALGARY — French energy giant Total says it is writing off $9.3-billion (US$7 billion) worth of oilsands assets in Alberta and cancelling its membership in the Calgary-based Canadian Association of Petroleum Producers.

Total now considers oil reserves with high production costs that are to be produced more than 20 years in the future to be “stranded” given its carbon reduction targets and because the resource may not be produced by 2050, the Paris-based company said Wednesday.

It will take writedowns worth $7.3 billion related to its 24.6 per cent ownership in the Fort Hills oilsands mine operated by partner Suncor Energy Inc., the company said, and its 50 per cent stake in the Surmont thermal oilsands project operated by partner ConocoPhillips.

Total will also write off $2 billion in other oilsands assets, it said, along with $1.07 billion on its liquefied natural gas assets in Australia.

Total said it is leaving CAPP because of a “misalignment” between the organization’s public positions and those expressed in Total’s climate ambition statement announced in May.

“It is disappointing that they would write down Canadian assets, and increase their focus in Africa and Brazil and the Middle East,” said CAPP CEO Tim McMillan in an interview.

“As a company, over the last few years, they’ve increased investment and focus in those jurisdictions.”

He added it’s disappointing Total is bowing out of CAPP but said, “that’s their prerogative.”

In May, Suncor registered an impairment charge of $1.38 billion on its 54.1 per cent share of Fort Hills in view of lower oil price prospects.

The other partner in Fort Hills, Vancouver miner Teck Resources Ltd., took a $474-million writedown in May on its 21.3 per cent stake and has also cancelled its CAPP membership, saying it was part of a cost-cutting program.

“Total’s decision to write down their tar sands assets and quit Canada’s biggest oil lobby group for its opposition to action on climate change underscores the urgency of ensuring that COVID-19 stimulus plans grow a green economy and transition workers securely into it,” said Greenpeace Canada campaigner Keith Stewart on Wednesday.

“As the world transitions away from fossil fuels, starting with the most polluting sources, the tar sands are hemorrhaging investors.”

Total has been distancing itself from the oilsands for several years, although a Canadian Press analysis last year revealed it actually produced more from the oilsands in 2018 than any other foreign company.

When it sold its undeveloped Joslyn oilsands mining project to Canadian Natural Resources Ltd. in 2018, it said it was part of a strategy to move away from high cost oilsands investments.

The same rationale was used in reducing its stake in Fort Hills in 2017.

Earlier this week, Frankfurt-based Deutsche Bank said it would join a list of European lenders and insurance companies that say they won’t back new oilsands projects.

The German bank said its new fossil fuels policy will also prohibit investing in projects that use hydraulic fracturing or fracking in countries with scarce water supplies, and all new oil and gas projects in the Arctic region.

Two years ago, Europe’s largest bank, HSBC Holdings plc, announced it would no longer offer financial services for new oilsands projects or pipelines, a move that led to Suncor vowing to end all business with HSBC, including in its conventional oil operations in Europe.

This report by The Canadian Press was first published July 29, 2020.

Companies in this story: (TSX:SU, TSX:CNQ)

Dan Healing, The Canadian Press

Oilsands

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

Just Posted

File photo
Gov’t of Alberta identifies estimated 300 new COVID-19 cases Sunday

Online COVID-19 dashboard unavailable as upgrades being completed

COVID
Red Deer down to 313 active cases of COVID-19

Alberta reports an additional 411 COVID-19 cases

THE CANADIAN PRESS/Alex Panetta
Economists “cautiously hopeful” for economic recovery in Alberta

Charles St. Arnaud says Alberta’s recovery will rebound along with roll-out of the COVID-19 vaccine

Alberta’s chief medical officer of health Dr. Deena Hinshaw acknowledged that Friday would be one year since the first case of COVID-19 was identified in the province. (photography by Chris Schwarz/Government of Alberta)
Three more Red Deer COVID-19 deaths, 331 active cases in Alberta

Red Deer is down to 362 active cases of the virus

Elvira D’Angelo, 92, waits to receive her COVID-19 vaccination shot at a clinic in Montreal, Sunday, March 7, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
‘It’s been a good week’: Tam hopeful on vaccines as pandemic anniversary nears

Tam says the addition of two new vaccines will help Canadians get immunized faster

A woman walks through Toronto’s financial district on Monday, July 30, 2018. A new poll suggests most Canadians believe there’s still a long way to go to achieve gender equality in this country. THE CANADIAN PRESS/Graeme Roy
Canadians, especially women, say gender equality not achieved in Canada: Poll

Poll results themselves underscore the challenge, with more men believing equality had been achieved

This image provided by Harpo Productions shows Meghan, The Duchess of Sussex, left, in conversation with Oprah Winfrey. (Joe Pugliese/Harpo Productions via AP)
Race, title and anguish: Meghan and Harry explain royal rift

Meghan said she struggled with concerns within the royal family about her son’s skin colour

Kiara Robillard is seen in an undated handout photo. When the pandemic began, Robillard had to rush back home to Alberta from California, where she had been living for five years, after she was struck by a truck that broke her spine in two places. THE CANADIAN PRESS/HO-Kiara Robillard, *MANDATORY CREDIT*
‘It kind of clicks:’ Text4Hope program helps with depression, anxiety during pandemic

Participants receive one text message every morning for three months

(The Canadian Press)
‘Worse than Sept. 11, SARS and financial crisis combined’: Tourism industry in crisis

Travel services saw the biggest drop in active businesses with 31 per cent fewer firms operating

Hockey hall-of-fame legend Wayne Gretzky, right, watches the casket of his father, Walter Gretzky, as it is carried from the church during a funeral service in Brantford, Ont., Saturday, March 6, 2021. HE CANADIAN PRESS/Nathan Denette
Walter Gretzky remembered as a man with a ‘heart of gold’ at funeral

The famous hockey father died Thursday at age 82 after battling Parkinson’s disease

Supporters rally outside court as Pastor James Coates of GraceLife Church is in court to appeal bail conditions, after he was arrested for holding day services in violation of COVID-19 rules, in Edmonton, Alta., on Thursday March 4, 2021. THE CANADIAN PRESS/Jason Franson
‘Law remains valid:’ Pastor accused of violating health orders to remain in jail

The Justice Centre for Constitutional Freedoms is representing the pastor

A decommissioned pumpjack is shown at a well head on an oil and gas installation near Cremona, Alta., Saturday, Oct. 29, 2016. The Alberta Energy Regulator says it is suspending all of the licences held by an oil and gas producer with more than 2,200 wells and 2,100 pipelines after it failed to bring its operations into compliance. THE CANADIAN PRESS/Jeff McIntosh
Alberta Energy Regulator suspends licences of oil and gas producer that owes $67M

The company is being asked to comply with past orders to clean up historic spills and contamination

Most Read