Zijin Mining to take 9.9% stake in Montage Gold
As part of the deal, the Lundin Family Trust also agreed increase its stake in the company from 17.7% to 19.9%.
Reuters reports US lawmakers approved legislation late on Tuesday setting a November 1 deadline for the Obama administration to decide the fate of a proposed $7 billion pipeline to transport Canadian oil sands crude to refineries on the Gulf coast and ease the glut in the Midwest hub.
The price oil sands producers can charge for exports to the US is falling further behind the international benchmark because of the lack of pipelines and hedge funds have started to bet that the spread could go as high as $50/barrel leaving Alberta producers $75 million out of pocket per day.
Since Brent, the North Sea benchmark, hit record premium to West Texas Intermediate on June 15 of $23.34 intraday, the spread has narrowed to just under $20 week but Financial Times on Monday reported some veteran oil watchers and hedge funds predict a scenario where oil arriving into the Cushing Oklahoma hub where the price of WTI is set will exceed the intake capacity of regional refiners already running at 96.6% capacity.
Although some oil will move elsewhere by rail, barges and trucks, it will soon start to fill up storage tank capacity. If, and when, that happens, WTI could drop to more than $50 below Brent and, ultimately, force oil companies to shut production.
Canada exports two million barrels of crude to the US per day of which 1.5m come from oil sands which means under this scenarion Alberta producers could be losing out on a possible $75 million in revenues each and every day – that is if they keep pumping at all.
Reuters reports Keystone XL requires approval from the State Department because it crosses the Canada-US border and has attracted strong opposition from green groups because of the carbon-intensive nature of oil sands production.
Comments
Dawn Marie
I am biding this project with my Saudi friends……..