Deep sea mining puts $560 billion in land extraction at risk — report
Even in optimal scenarios, the activity would generate only $6.25 million in tax revenue for countries involved, says Planet Tracker.
Canada’s oil sand giant Suncor Energy (TSX, NYSE: SU) announced Monday it is selling its natural gas business to UK-based energy firm Centrica PLC (LON:CNA) and state-owned Qatar Petroleum International for a $1 billion (Cdn).
The deal is the latest step in Qatar Petroleum’s response to the North American shale gas boom, which has deprived it of what a few years ago was expected to be a large US market for its liquefied natural gas exports. Instead, the company is now planning to export LNG from the US in a joint venture with Exxon Mobil Corp. (NYSE:XOM) and says it will continue to look for investment opportunities in North America.
The transaction will help Centrica produce a greater proportion of the energy that currently sells to customers from its own assets from its North American retail unit, Direct Energy. It is also Centrica’s first big deal after announcing two months ago that it would no longer invest in new UK nuclear power plants, consequently freeing up cash to return to shareholders and invest elsewhere.
The sale includes properties situated across multiple regions in Alberta, northeast British Columbia and southern Saskatchewan, which have proven and probable reserves of 978 billion cubic feet equivalent of natural gas, although around 10% of the production is actually oil. Excluded are the majority of Suncor’s unconventional natural gas properties in the Montney region of BC and the company’s Wilson Creek, Alberta unconventional oil assets.
The package also includes over 1 million acres of undeveloped land and there is significant potential for reserves and production upside through the use of horizontal drilling and multi-stage fracturing, Centrica said in a separate release.
The transaction is expected to close in the third quarter of 2013.
