PetroChina To Sell Canadian Oil Sands Assets As Losses Mount

PetroChina (PTR) is considering selling its assets in Canada’s oil sands to stem mounting
losses and divert money to more lucrative projects sites in the Middle East and Asia.

The Reuters News Agency is reporting that PetroChina's plan follows a similar move by China’s
CNOOC, which is preparing to exit its operations in Canada because of concerns the assets
could become subject to economic sanctions.

PetroChina's decision is being driven largely by mounting financial losses. The Chinese oil and
gas giant has suffered billions of dollars of losses in Canada. PetroChina is also considering
selling its natural gas assets in Australia for the same reason.

Specifically, PetroChina is discussing selling its wholly owned MacKay River Oilsands and
Dover Oilsands projects in Canada because of losses producing and processing the fuel into
bitumen.

PetroChina paid $1.9 billion in 2009 for a 60% stake in the Dover and MacKay River projects
from Athabasca Oil (ATH) and then purchased the remaining stakes in the projects for a similar
amount in 2012 and 2013.

The first phase of the MacKay project began in 2017 with 35,000 barrels per day (bpd) of
bitumen, climbing to a peak of 150,000 bpd, while the Dover site is expected to eventually
produce 250,000 bpd of bitumen, according to PetroChina Canada’s website.

PetroChina is reported to be upset with the relatively high production costs of $70 per barrel at
the Canadian projects.

China's state energy companies went on a buying spree in Canada’s oil patch in the early
2010s, with CNOOC paying $15 billion to takeover Nexen in 2013. But China’s involvement in
Canada’s energy sector dropped off following the 2014/2015 oil price collapse.

PetroChina’s stock is up 7% year to date at $48.08 U.S. a share.