I recall a 260 billion figure to "clean up" the oil sands. Is CNRL/Suncor etc responsible for funding this?
That 260 billion figure is if all the companies up and disappeared leaving everything as is across the country. It was a bit of a scare tactic to get people to understand the amount of liability there is, but it doesn't take into account value of the current assets/projects.
I think the good thing is things are being cleaned up slowly. I think there are things being done to help companies work together to reduce the overall liability.
Wouldn't the best way to manage this be to setup a fund that is paid into all year and then money allocated from there to an organization that is responsible from a provincial standpoint of reclaiming the sites and cleaning them up?
Lots of provinces do this with gravel pit cleanup. You pay a small amount as a gravel pit owner each year, then that money can be used to clean up the pit and restore it once it is no longer useful. If the funds are properly managed you could easily pay for everything.
Wouldn't the best way to manage this be to setup a fund that is paid into all year and then money allocated from there to an organization that is responsible from a provincial standpoint of reclaiming the sites and cleaning them up?
Lots of provinces do this with gravel pit cleanup. You pay a small amount as a gravel pit owner each year, then that money can be used to clean up the pit and restore it once it is no longer useful. If the funds are properly managed you could easily pay for everything.
From the AERs site, it looks like a yearly fee that goes towards future reclamation costs, and not a prohibitive upfront cost before any drilling can start.
That's also 3100 sites that have just been left in their current state operation, not even formally abandoned let alone any remediation work done.
A good chunk are Lexin wells; which a settlement just occurred between all parties. Now they can sell off assets as before there was certain facilities not included that limited the marketing. A good chunk of the wells have already been purchased (High River assets) or at least the deal is done according to receiver report.
Also, each licensee is rated by there ability to cover their liabilities with their assets.
Most simple, Deemed Assets($)/Deemed liabilities($) = LMR
if LMR is less than 1 then you need to pay security to the AER held in trust in the amount it takes to make your LMR ratio 1.
It’s actually 2 now. You need 2x assets to liabilities minimum in order to accept transfer of assets. Used to be 1, but Alberta moved it to 2. It’s a huge reason why M&A has slowed so much actually.
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It’s actually 2 now. You need 2x assets to liabilities minimum in order to accept transfer of assets. Used to be 1, but Alberta moved it to 2. It’s a huge reason why M&A has slowed so much actually.
Yes, for transferring but the industry threshold for requiring a security payment or not is 1.
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If you believe that pipelines will eventually get built CNRL will be a great buy. Positive cash flowing and a war chest to continue to make moves to acquire these assets as the prices drop.
If you can buy an asset that cost 600 million to build for 300 million and it will be positive cash flow at reasonable diffs when the market recovers. Millions will be made in the next 2 years as the bones of the assets are picked through.
I think we are going to see a real large correction on the asking price for assets.
Junior sectors smashed, capital markets heavily restricted. Who is buying all this crap that’s going up for sale?
Nobody. That’s who. Nobody has the money to do it. Could be some real steals on the horizon for distressed assets.
CNRL, Suncor, Husky. Deep pockets, integrated, long term views.
Wouldn't shock me at all to see CNRL go on a bit of a buying spree. Jackfish, Pengrowth, etc.
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Not relavent to Alberta but I wonder if the new NFLD crown corporation for oil and gas E&P will create any new opportunities for unemployed professionals to relocate. I'd be willing to relocate to St. John's for a geo job. I actually interviewed with Suncor in St. John's a number of years ago but it didn't work out.
A Minnesota regulator has confirmed its approval of Enbridge Inc’s Line 3 crude oil pipeline replacement, allowing the $7 billion project that will ship more barrels out of western Canada to move forward, the company said on Wednesday.
The Minnesota Public Utilities Commission initially approved Enbridge’s plan to rebuild the aging 1,031-mile (1,660-km) pipeline that runs from Alberta to the U.S. state of Wisconsin in June, but that decision was challenged by Minnesota’s governor in February.
On Tuesday, the PUC denied all petitions asking for its decision to be reconsidered, according to minutes of the meeting. Minnesota PUC spokesman Dan Wolf said a formal order will be issued soon.
Doesn't look like it changes the pipeline being delayed until the last quarter of 2020 though unfortunately. It's better than the opposite ruling but much like the NEB approval (again) of TMX last month it doesn't change anything materially on the ground. Enbridge stock along with most of the producers here dropped upwards of 5% the day after the delay was announced, most of those stocks along with Enbridge itself were down today as well.
Yeah reading more this is basically a double approval as this Minnesota Public Utilities commission approved Line 3 already in June last year but it was challenged by the Minnesota Governor (why any elected official would oppose the placing of a 50 year old pipeline with a new one is beyond me, guy is probably getting paid to obstruct like other politicians). So this whole exercise in futility needed to be carried out again, resulting in the delay of another year and this project still needs a bunch of local permits which WILL be the subject of even more shenanigans given how steadfast the obstructionist efforts are against any Canadian export pipelines. After a decade of trying to get projects through we're still 18 months minimum before any oil is flowing through pipelines, and Line 3 is a minor one that opens no new markets for our oil. The situation is still supremely ####ed up.
Last edited by DiracSpike; 03-27-2019 at 04:39 PM.
