Pumpjacks at work pumping crude oil near Halkirk, Alta., in June, 2007.Larry MacDougal/The Canadian Press
The conglomerate run by the wealthy Koch brothers has sold its oil-sands assets to a unit of Paramount Resources Ltd. for an undisclosed sum following halted attempts to develop projects.
Koch Industries Inc., whose billionaire owners Charles and David Koch are well-known in the United States for supporting conservative causes, transferred five oil-sands leases to Cavalier Energy, which is the oil-sands unit of Calgary-based Paramount, according to the Alberta Energy Regulator (AER).
“The majority of Koch Oil Sands licences have been transferred to Paramount Resources Ltd. All of the remaining licences are for well sites and [they] have been abandoned, which means that they have been permanently sealed and taken out of service,” AER spokesman Shawn Roth said.
The companies applied for the asset transfers in late June and the AER approved them on Aug. 1, according the regulator’s website.
The deal, first reported by the Financial Post, represents the latest exit of a foreign-owned company from the Alberta oil sands. In April, Oklahoma-based Devon Energy Corp. sold its oil-sands business, including the producing Jackfish project, to Canadian Natural Resources Ltd. for $3.8-billion. Others that have divested include ConocoPhillips, Royal Dutch Shell PLC and Norway’s Equinor.
Details of the deal were not known, and Paramount did not disclose the acquisition, suggesting the price was not large. Jim Riddell, chief executive officer of Paramount, and officials with Koch Industries were not immediately available for comment.
In 2014, Wichita, Kan.-based Koch had proposed an $800-million steam-driven oil-sands project called Muskwa, but scrapped the plan two years later, blaming “regulatory uncertainty” it said was caused by former Alberta premier Rachel Notley’s carbon-reduction policies.
In 2003, the company halted its $3.5-billion Fort Hills mining project, blaming Canada’s ratification of the Kyoto Accord. It subsequently sold its interest, and Suncor Energy Inc. and its partners have since built a project at the site for $17-billion.
In 2012, Koch put six properties, comprising 220,000 net acres, on the block, with total bitumen in place estimated at more than eight billion barrels. It did not receive the bids it had hoped and took the assets off the market.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.
Jeffrey Jones