Foreign Exodus in Oilsands Aligns Canadian Interests.....

With several multinational energy companies recently announcing their exodus from the Canadian oilsands, interests between Canada's energy patch and federal and provincial governments have now been aligned. Recent deals include Canada's largest oil and gas company Suncor (SU-T) acquiring a control position in competitor Syncrude Canada. Other major deals include the purchase of Royal Dutch Shell's oilsands assets by Canadian Natural Resources (CNQ-T), and the purchase of ConocoPhillips’ oilsands assets by Cenovus Energy (CVE-T). Notably, Canadian energy companies are now in charge of roughly 70% of oilsands production, and some have become so large they are giants of the Canadian economy. Higher Canadian ownership should lead to more efficient supply chains, better connectivity, and more motivation to work co-operatively to make the business more efficient.  

Going forward, now that the Canadian oilsands is increasingly owned by Canadian companies, Canada's oil patch can now work more effectively with provincial and federal governments to try and get the proper access with the right environmental standards to market. This collaboration will effectively create a Canadian brand, but will require that the various levels of government look out for Canadian interests and enable Canadian oilsands producers to become more competitive globally (particularly when access to capital has become more difficult, as other jurisdiction such as the U.S. are more supportive around either regulation or taxation). Looking forward, the international exodus from the Canadian oil sands will likely continue, as companies like BP PLC, Chevron Corp. and Total SA evaluate their positions. As such, Canadian energy producers and government will have a chance to further align their interests and strengthen the competitiveness of this world class asset.