Cenovus Energy looks at oilsands growth as it signs $5.7B deal to buy Athabasca Oil
Cenovus Energy has announced a $5.7 billion deal to acquire Athabasca Oil, aiming to significantly increase its oilsands production by 2032. The move follows government efforts to streamline regulatory reviews for major energy projects in Canada.
Why it matters
This acquisition signals a major consolidation in the Canadian energy sector and reflects industry optimism regarding new pipeline infrastructure and government tax incentives.
Athabasca has 40,000 barrels per day of oilsands production currently, but Cenovus sees the opportunity to ratchet that up to 115,000 by 2032.
"That represents one of the most significant organic growth opportunities available in Canadian oilsands today," CEO Jon McKenzie told a conference call with analysts Monday.
The deal comes days after the federal government deemed a proposed million-barrel-a-day pipeline from Alberta to British Columbia the first national interest project under legislation passed last year. The designation means the pipeline will be subject to a streamlined regulatory review through the Major Projects Office.
There have been questions over whether Cenovus and its oilsands peers would be willing to invest in enough production growth to fill that massive pipeline by the time it starts up around 2032, as well as several other pipeline expansions set to come online sooner.
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