Chevron explores sale of $2.5-bn stake in Athabasca Oil Sands project

US oil giant Chevron Corp is exploring the sale of its 20-per cent stake worth about $2.5 billion in Canada's Athabasca Oil Sands project, Reuters yesterday reported, citing people familiar with the matter.

Chevron has discussed with investment banks the idea of selling the stake in the western Canadian oil sands project, the report said.

The move comes a month after European energy giant Royal Dutch Shell struck a deal to sell most of its Canadian oil sands assets to Canadian Natural Resources Ltd for $8.5 billion (See: Shell to divest most Canadaian oil sands assets to Canadian Natural for $8.5 bn)

California-based Chevron does not find the oil sands business appealing in the current market scenario as low oil prices make it more challenging for global producers to generate profits, the report added.

Chevron holds a 20-per cent non-operated working interest in the Athabasca Oil Sands Project near Fort McMurray, Alberta.

Oil sand is mined from both the Muskeg River and the Jackpine mines and transported by pipeline to the Scotford Upgrader near Edmonton, Alberta, where it is upgraded into synthetic oil using hydro-processing technology.

In 2016, average net daily synthetic oil production in the Athabasca Oil Sands Project was 50,000 barrels.

Late last year Chevron had said it planned to sell assets worth about $10 billion by 2017, in an effort to weather a global slump in energy prices.

Chevron, the largest oil producer in the US after Exxon Mobil, is restructuring by selling assets, cutting jobs and delaying drilling projects after oil prices last year fell to the lowest level in more than a decade.

Last year, it sold its Indonesian and Philippines geothermal assets to Star Energy Consortium, part of Philippine property-to-banking conglomerate Ayala Corp, for a reported $3 billion, and last month agreed to sell its 75-per cent stake in its South African assets and its subsidiary in Botswana to China Petroleum and Chemical Corporation (Sinopec) for nearly $1 billion.

In February, China's state-run Zhenhua Oil signed a preliminary deal to buy Chevron's natural gas fields in Bangladesh that are worth about $2 billion.