Chevron Canada Ltd. announced Monday that it has agreed to sell its stakes in the Athabasca Oil Sands Project and the Duvernay shale to Canadian Natural Resources Ltd. for $6.5 billion. This all-cash transaction is part of Chevron’s broader divestment strategy to optimize its global energy portfolio, with the goal of selling off $10 billion to $15 billion in assets by 2028.

Chevron to Sell Oil Sands : Athabasca and Duvernay Assets

The deal includes Chevron’s 20% nonoperated interest in the Athabasca Oil Sands Project and its 70% operated interest in the Duvernay shale, both located in Alberta, Canada. These assets contributed approximately 84,000 barrels of oil equivalent per day, net of royalties, to Chevron’s output in 2023.

The Athabasca Oil Sands Project is rich in bitumen, a heavy form of crude oil, and includes key assets such as the Muskeg River and Jackpine mines, the Scotford Upgrader, and the Quest Carbon Capture and Storage facility. Meanwhile, the Duvernay shale is known for its light crude oil and liquids.

Canadian Natural’s Strategic Expansion

Canadian Natural, which already holds a stake in the Athabasca Oil Sands Project, will increase its working interest to 90% following this transaction. The company highlighted the acquisition's potential to generate immediate free cash flow and support its strong operating culture.

“These assets are a great fit for Canadian Natural and will allow us to further implement our strong operating culture and drive significant value for shareholders,” said Canadian Natural president Scott Stauth.

Chevron to Sell Oil Sands : Financing and Dividend Increase

To fund the acquisition, Canadian Natural secured a fully committed $4 billion term loan facility, backed by the Bank of Nova Scotia and the Royal Bank of Canada, with the remainder financed through cash and committed bank facilities. In conjunction with the acquisition announcement, Canadian Natural’s board also approved a 7% increase in its quarterly dividend, raising it to $0.5625 per share, with the next payment set for January.

Closing and Future Plans

The sale is expected to close in the fourth quarter of 2024, pending regulatory approvals and other customary conditions. This transaction forms a key part of Chevron’s larger divestment plan, aligning with its strategy to streamline and optimize its global operations.