Many environment organizations believe that the Canadian oil sands are not suitable for production, as they are contaminated, and should remain in the ground. This trend has recently become common even amongst some of the largest oil companies in the world.
The CEO of the international oil producer Statoil claims that a big amount of fossil fuels should remain in the ground, such as coal, as well as oil and gas. Statoil is currently under pressure due to the fact that its oil wells in the Barents Sea have already begun to dry up.
If time will prove that it is, indeed, necessary to leave heavy oil and oil sands unexploited, huge amounts of oil will be left in the ground. The USGS claimed that as much as 70% of the world’s oil reserves come from heavy oil and bitumen, many of which is from Venezuela – the last place on earth where oil companies want to do business.
In 2016, Statoil reportedly abandoned their oil sands from Canada, selling their assets to a company called Athabasca Oil Corp. Statoil is not the only company to do this, though – ConocoPhillips have also sold $13.3 billion in assets to Cenovus Energy this year. Furthermore, Shell sold $4.1 billion assets to the Canadian Natural Resources Organization, and ExxonMobil, the famous US company, cut $3.5 billion of its stake in Canadian oil sands in February, declaring it was not viable on the markets anymore.
Unsurprisingly, the main reason behind these companies selling their assets is economic: it is a known fact that oil sands are expensive, and it makes no sense for companies to allocate high capital for oil sand projects that can last for decades. ConocoPhillips chief executive claimed that a large part of the company’s new investment will be channeled to US shale.
Although the future of oil shale work remains uncertain, especially because there are so many debts in the industry and little profits, its main advantage is that nowadays it’s extremely simple to drill a shale well, unlike oil sands, which can take years.
However, even with the heavy migration of big oil companies from Canada, the production of Canadian oil sands is not going down. The Canadian production will reportedly sky-rocket by about 900,000 barrels per day in 2022, according to the International Energy Agency, thus increasing production to more than 5 million barrels per day.