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ROB Insight is a premium commentary product offering rapid analysis of business and economic news, corporate strategy and policy, published throughout the business day. Visit the ROB Insight homepage for analysis available only to subscribers.

In a perverse way, this is how a market is supposed to function: ConocoPhillips Co. announcing that it no longer wants to sell oil sands assets that no one wants to buy anyway.

After having half of its oil sands assets – valued at as much as $5-billion (U.S.) – on the market for more than a year, the energy giant has yanked them off the sales block. Officially, the company has succeeded in reaching its company-wide divestment target through asset sales elsewhere, and says it no longer needs to sell. Unofficially, there just weren't any takers, at least not at an acceptable price.

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Funny how, just a couple of years ago, Canadians were worrying that foreigners were about to buy up the oil sands, stealing away our national birthright. Now, ConocoPhillips joins the growing list of foreign owners in the past year who wanted to sell oil sands assets – but gave up for a lack of buyers.

ConocoPhillips's failure to find a deal may be the most telling. When it put the properties up for sale in early 2012, in what was an increasingly heated seller's market in the oil sands, the head of the company's Canadian division called them "world-class trophy assets": Producing properties that sit on an estimated 30 billion barrels of oil.

But the trophies of the oil sands, in the region's current relatively mature stage of its evolution, require deep pockets, expertise and years to develop. The list of qualified buyers is pretty short, and increasingly global. Canada's new investment policy announced late last year, making it near-impossible for wealthy state-owned oil companies to acquire control of major oil sands assets, has removed some of the biggest potential buyers from that list.

ConocoPhillips was believed to have been in talks with a trio of state-controlled firms from India before Ottawa unveiled its new foreign-investment restrictions in December; the fact that the deal clearly fizzled won't go unnoticed among the critics of Ottawa's new policy, who had argued from the get-go that the restrictions would starve the oil sands of investors and hurt the value of assets.

It certainly doesn't help matters that the uncertainty surrounding the future of the proposed Keystone XL pipeline has increased the risk involved in multi-billion-dollar, long-term development projects in the oil sands. And all this comes at a time when big investors have a new option for their money – U.S. shale oil – that offers the lure of quicker returns, stronger pricing and smaller long-term commitments.

Those with major stakes in the oil sands may not be thrilled to hear it, but maybe this is a positive outcome. A year ago, the sector was bracing for an international race to acquire and develop mega-projects that would flood the market with new supplies for which the transportation infrastructure was woefully unprepared. Thanks to regulatory and market forces, the brakes have been slammed. It was needed. Oil sands development will still happen – but it's increasingly clear it will be come at a time and scale the market can support, and nothing more.

David Parkinson is a contributor to ROB Insight, the business commentary service available to Globe Unlimited subscribers. Click here for more of his Insights, and follow him on Twitter @parkinsonglobe.

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