Ecuador court gives green light for Silvercorp, Salazar’s El Domo project
The ruling removes the last major obstacle for the $250 million project, located 150 km northeast of Guayaquil.
Mergers and acquisition activity in Canada’s oil sands are at lows last seen in 2004, as increased government scrutiny of deals and a slump in the price of bitumen-derived oil hurt the industry.
Bloomberg reports Canadian authorities are not only “digging deeper” into deals by foreign state-owned companies, but are also now vetting investments of less than $344 million that don’t require approval under current foreign takeover rules.
After more than $50 billion worth of investment into the oil sands over the past seven years, including last year’s $15 billion purchase of Calgary-based Nexen by China’s CNOOC and the $5 billion sale of Progress Energy to Malaysia’s state-owned oil company, 2013 has seen no investment even reach the $1 billion mark.
The price oil sands producers receive fell back to around $70 a barrel on Monday, down more than 20% from 2013 highs reached in July, adding further pressure to oil sands stocks which have massively underperformed their US peers.
The fall in the price of Western Canada Select – a blend of heavy oil sands crude and conventional oil – comes on the back of a deepening discount to US benchmark West Texas Intermediate (WTI) of $32, which itself trades more than $6 below international benchmark North Sea Brent.
Today’s effective price for for bitumen-derived oil from Alberta’s oil sands of $70 a barrel is a vast improvement from the five-year lows of just $45 hit mid-December 2012, but marks something of a reversal for the blend that managed to narrow the gap to Brent to just $16.50 in July.
