France’s TotalEnergies plans to divest its oil sands business in Canada and take the new company public because it no longer fits its strategy, which now focuses on low-carbon energy, the company said during of a presentation to investors.
“We are not the best shareholder of these assets because, as we have a climate strategy, we do not want to invest in these assets,” said chief executive Patrick Pouyanne, quoted by Reuters.
Pouyanne noted that the oil sands assets the company operates in Canada are expected to generate some $1.5 billion in cash flow this year.
The French supermajor recently released an update on its strategy for the future, noting how its focus on low-cost oil and gas projects and a strong expansion of its LNG operations have placed the company in a favorable position in the current context of the energy market.
TotalEnergies also boasted that its low break-even cost per barrel of oil, at $25, enabled it to generate additional cash flow for each barrel produced, to the tune of $15 billion starting this year.
However, many of TotalEnergies’ future projects relate to electricity and more particularly to renewable electricity, breaking with what has been its core business for decades. The French supermajor is among the most active “transformers” in the energy sector and aims to become one of the five largest renewable energy providers in the world.
In accordance with its transformation plans, TotalEnergies is in the process of withdrawing from Canada. In 2020, the company took a $7 billion write-down based on its 2020-2023 oil price estimates. The company also said that year that it expects oil demand to peak by 2030.
By Charles Kennedy for Oilprice.com
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