Canadian Natural Resources Expands with Chevron Acquisition

Canadian Natural Resources Ltd. (CNRL), a prominent player in Canada’s oil and gas sector, has announced the acquisition of Chevron‘s 20 percent stake in the Athabasca Oil Sands Project (AOSP). The all-cash transaction also includes Chevron’s properties in the Duvernay formation in Alberta. This strategic move by the Calgary-based company reinforces its longstanding trend of acquiring assets from international corporations exiting Canada.

During an analyst call on Monday, Scott Stauth, president of CNRL, emphasized the potential of these newly acquired assets, noting, “Both these assets provide significant free cash flow for decades.” CNRL aims to enhance production efficiency and reduce costs through continuous improvement strategies. The acquisition is set to increase the company’s production by approximately 122,500 barrels of oil equivalent (boe) per day next year.

This acquisition strengthens CNRL’s position as Canada’s largest petroleum producer, furthering its output, which stood at 1.29 million boe per day during the second quarter. According to Wood Mackenzie, a consultancy firm, CNRL’s new status will place it among the top 12 largest petroleum producers globally, excluding national oil companies.

The transaction amplifies CNRL’s synthetic crude oil output by adding about 63,000 barrels per day and includes interests in non-producing oilsands properties. The acquisition of the Duvernay assets, targeted to produce about 60,000 boe per day next year, marks another significant addition to CNRL’s portfolio.

Historically, CNRL has capitalized on similar opportunities, such as acquiring BP Amoco’s oil properties in 1999 and purchasing significant assets from Royal Dutch Shell and Marathon Oil in 2017. These moves have contributed to the “Canadianization” of the oilsands, with Canadian ownership of oilsands output rising to about 82 percent today, compared to 52 percent in early 2017.

Chevron’s exit from portions of Alberta marks a significant shift in its operations in Canada, where it has been active since 1938. The sale aligns with Chevron’s broader strategy to finance its US$53 billion acquisition of Hess Corp. announced last October. While Chevron will maintain some non-operated interests in Canada, its presence in Alberta will be notably reduced.

Financial analysts and investors view CNRL’s latest acquisition as a calculated move that could further enhance the company’s profitability. Eric Nuttall, a senior portfolio manager at Ninepoint Partners, who holds shares in CNRL, remarked, “Given Murray’s track record, if Murray’s buying, I certainly don’t want to be selling.” This sentiment underscores the trust investors have in CNRL’s strategic leadership under the guidance of Executive Chairman Murray Edwards.