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Canadian Natural Resources buying Chevron’s Alberta assets for US$6.5B

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CALGARY – Canadian Natural Resources Ltd. has signed a deal to buy Chevron Canada Ltd.’s interests in the Athabasca Oil Sands Project and Duvernay shale for US$6.5 billion.

The all-cash deal will see Calgary-headquartered CNRL — one of the largest independent oil and gas producers in the world — acquire Chevron’s 20 per cent interest in the Athabasca Oil Sands Project.

This includes a 20 per cent stake in the Muskeg River and Jackpine mines in northern Alberta, as well as a 20 per cent stake in the Scotford Upgrader northeast of Edmonton and the Quest carbon capture and storage facility, also north of Edmonton.

As a result of the deal, CNRL consolidates its control of the Athabasca Oil Sands project, increasing its working interest from 70 per cent to 90 per cent. Shell Canada owns the remaining 10 per cent.

The transaction adds approximately 62,500 barrels of synthetic crude oil per day to CNRL’s production. In a conference call with analysts Monday, CNRL president Scott Stauth said the Athabasca site’s close proximity to CNRL’s Horizon oilsands mine will allow the company to find efficiencies and optimize its production in the region.

“I can see us utilizing the equipment more efficiently between the two sites,” Stauth said.

“There will be production increase opportunities in the future at (Athabasca). The assets are similar to Horizon in terms of the reserve, so you can look for that down the road.”

With the deal, U.S.-based Chevron becomes the latest foreign company to exit the Canadian oilsands. Others that have made similar moves in recent years include Norway’s Statoil, France’s Total SA, and Arkansas-based Murphy Oil.

Chevron spokeswoman Jennifer Werbicki confirmed in an email that the company will no longer have interests in the oilsands following the close of the transaction.

She said Chevron will continue to have non-operated interests offshore Atlantic Canada and will retain its interests in British Columbia and Northern Canada.

Canadian Natural will also acquire Chevron’s 70 per cent operated working interest of light crude oil and liquids rich assets in the Duvernay shale play in Alberta. Production from those assets is expected to average 60,000 boe/d in 2025, CNRL said.

The company is already a large producer of natural gas and light crude oil, with a vast land base across Western Canada. Stauth said there are “significant” new drilling opportunities among the Chevron assets being bought, and added CNRL sees the potential to grow production to 70,000 boe/d by 2027.

CNRL has a history of expanding its asset base through acquisitions. The company acquired its existing stake in the Athabasca Oil Sands project from Shell Canada and Marathon Oil in 2017, and in 2019, it bought the Canadian operations of U.S.-based Devon Energy for $3.8 billion.

Its ability to optimize production through strategic acquisitions is one reason CNRL has been a darling of the investment community in recent years.

Not long ago, RBC Capital Markets analyst Greg Pardy called CNRL his “favourite senior producer” in a note to clients. Pardy said the company and other oilsands giants are benefiting from the additional export capacity of the Trans Mountain pipeline expansion, which came online earlier this year, and have better financial resiliency than ever before.

“We remain unapologetically bullish on Canada’s oilsands majors in particular,” Pardy wrote.

CNRL’s deal with Chevron has an effective date of Sept. 1, 2024, and is expected to close during the fourth quarter of 2024.

CNRL also said Monday it will increase its quarterly dividend to shareholders by seven per cent to 56.25 cents per share starting with its next regular payment in January 2025.

Both Chevron and CNRL’s stock prices were trending higher Monday. CNRL shares were up 3.89 per cent of as of midday, while Chevron was up 0.58 per cent.

This report by The Canadian Press was first published Oct. 7, 2024.

Companies in this story: (TSX:CNQ)

The Canadian Press. All rights reserved.

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FIFA urged to put more human rights scrutiny into 2034 World Cup deal with Saudi Arabia

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ZURICH (AP) — Two months before FIFA is set to confirm Saudi Arabia as the 2034 World Cup host, the soccer body was urged again Friday to allow independent scrutiny of the kingdom’s human rights obligations for the tournament.

A group of law and human rights experts plus Saudi activists abroad want FIFA to mandate ongoing reviews — and a potential termination clause — into the 2034 World Cup hosting contract.

The advisers who came to Zurich on Friday want FIFA president Gianni Infantino, who is closely tied to Saudi political and soccer leaders, to learn from how Qatar was picked to host the 2022 World Cup. Qatar won in 2010 with little thought from FIFA’s then-leaders about legal safeguards and reputational challenges.

Saudi Arabia, like Qatar, is a traditionally conservative society and needs a huge construction project relying on migrant workers to build stadiums and other infrastructure for global soccer’s biggest event.

“There are really no excuses now,” British lawyer Rodney Dixon told The Associated Press. “If it means that they therefore have to come to a different kind of agreement in December, that is what they should do.”

World Cup hosting contracts will be signed after the Dec. 11 decision by more than 200 FIFA member federations at an online meeting. Saudi Arabia is the only candidate for 2034.

Promising not to be confrontational with FIFA, Dixon said: “We are not naive. It is not FIFA’s role to change the world. They are not the UN.”

The briefing in FIFA’s home city came two days after the UN General Assembly in New York rejected a Saudi bid to get a seat on the 47-nation Human Rights Council for the next three years.

On Friday, the would-be FIFA advisers cited Saudi Arabia’s record on freedom of speech and assembly, and laws on labor and male guardianship that limit women’s freedoms.

After Infantino was first elected in 2016, when scrutiny was intense on Qatar and its treatment of migrant workers, FIFA demanded a human rights strategy from future World Cup hosts.

Bid rules for the 2030 and 2034 men’s tournaments refer to “activities in connection with the bidding for and hosting” rather than rights in wider society.

In May, FIFA got an offer from the law and human rights experts to create an independent process for monitoring progress in Saudi Arabia.

Swiss law professor Mark Pieth, an anti-corruption advisor to FIFA from 2011-14, said they had been ignored and “we are here in Zurich to try again.”

In July, Saudi plans for the World Cup were published including a review of its human rights strategy by lawyers it chose, and 15 stadium projects.

Human Rights Watch researcher Joey Shea said Friday it documented “grave labor violations” against migrant workers who number more than 13 million, or about 40% of the kingdom’s population.

The scale of construction required for the World Cup and potential for labor abuses “is really, really chilling,” Shea said in a live link from London.

She cautioned that while rights groups had limited access to operate in Qatar ahead of the 2022 World Cup, there is “zero access” to Saudi Arabia.

Saudi soccer officials have consistently said the kingdom is making progress on social reforms as part of the Vision 2030 drive by Crown Prince Mohammed bin Salman to modernize and create a post-oil economy.

The 2034 bid campaign was contacted for comment Friday.

In a video message from Washington D.C., Abdullah Alaoudh of the Middle East Democracy Center insisted “the human rights situation in Saudi Arabia has worsened under Mohamed bin Salman’s leadership.”

Saudi Arabia was ranked No. 131 of 146 nations on gender issues by the World Economic Forum, Dixon noted.

“(There are) so many laws that prejudice women,” he said. “None of them are addressed by the Saudi bid.”

FIFA is evaluating World Cup bidders with reports likely in early December. It also must assess the human rights strategy of the sole candidate for the 2030 World Cup: co-hosts Spain, Portugal and Morocco with single games in Argentina, Paraguay and Uruguay.

“All relevant reports, including the independent human rights context assessments and the human rights strategies of all bidders for the 2030 and 2034 editions, are available on our website,” FIFA said Friday.

FIFA and Infantino have not held a news conference to take any questions on World Cup bids since the 2034 edition was fast-tracked toward Saudi Arabia one year ago.

Any protest among FIFA voters on Dec. 11 has been made less likely.

FIFA said last week both 2030 and 2034 awards will be combined in a single vote. Any European opposition to the Saudi bid also would count against Spain and Portugal. Victory by acclamation without an itemized vote is possible.

“If FIFA is desperate to give Saudi Arabia the World Cup,” Pieth said, “the least would be to see to it that the minimum of these (human rights) requirements is actually upheld.”

___

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Federal government forgoing $15 million in rental fees for Jasper businesses, town

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JASPER, ALTA. – The government of Canada will forgo up to $15.2 million in rental fees charged to the municipality of Jasper, Alta., as well as its residents and business owners over the next few years.

A devastating wildfire destroyed one-third of the Rocky Mountain tourist town in July, including 800 units of housing.

Because Jasper is located within a national park, residents, business owners and the town itself lease their homes and buildings from Parks Canada.

Although the fees included in the lease agreements vary, and in the case of residential homes and businesses in town the fee is just $1, Employment Minister Randy Boissonnault said Thursday this rent relief will help the town recover from the damage.

On Wednesday, Boissonnault was appointed by Prime Minister Justin Trudeau as the federal government’s ministerial lead on the Jasper rebuild.

“This rent relief will support lessees and licensees whose properties have been affected and are experiencing financial hardship and new costs to rebuild or repair damaged properties,” said Boissonnault in a news release.

Parks Canada has nearly 1,300 lease agreements in town, and 139 leases within the park.

The municipality won’t pay rent on its facilities to Parks Canada until 2027, while a few dozen businesses in the park that pay market rent will receive partial or full rent forgiveness until 2026 depending on fire damage and revenue.

Jasper Mayor Richard Ireland said in a release Thursday that the town is grateful for the government’s decision.

“By continuing to work effectively together, we can ensure that our local businesses and residents have the supports they need to help in our recovery process,” Ireland said.

Boissonnault also announced Thursday that certain backcountry camping spots in the park are now open for booking for the fall and winter season.

He also said that Maligne Road, which provides vehicle access to the famed Maligne Lake, will reopen on Friday.

This report by The Canadian Press was first published Oct. 10, 2024.

The Canadian Press. All rights reserved.



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Alberta recommits $1.53B to Calgary Green Line LRT construction

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EDMONTON – A month after announcing its money would be off the table, the Alberta government says it’s recommitting its $1.53-billion share towards Calgary’s beleaguered Green Line light rail project.

It’s prompted Alberta NDP Leader Naheed Nenshi to accuse the government of incompetence he claims could still cost taxpayers another $1 billion in penalties over cancelled contracts.

Transportation Minister Devin Dreeshen and Calgary Mayor Jyoti Gondek said in a joint statement Thursday they’ve agreed to continue work on the southern leg of what was a $6.2-billion transit project.

Calgary city council voted to wind it down last month after Dreeshen said the province would pull its funding without a redesign and extension of the Green Line’s route.

The city estimated it would cost $850 million to shut it down on top of the $1.3 billion already spent, but in late September Gondek made a last-ditch effort to ask the province to help salvage some pieces of the project they could agree on.

The two leaders said the province’s previously committed money will be available to support continuing work on the transit line, preserving more than 700 jobs.

In the meantime, a consulting firm hired by the province continues to work on a new alignment to meet Dreeshen’s demand that the downtown section not go underground.

Dreeshen has criticized the Green Line as a multibillion-dollar boondoggle that was poorly engineered and not properly costed from the beginning.

In recent months, the minister has pointed the finger at former Calgary mayor Nenshi – now Alberta NDP leader – calling it the “Nenshi nightmare.”

For his part, Nenshi has blamed the UCP government for delays that led to added costs.

In a statement Thursday, Nenshi said the United Conservative Party government is desperately backing down and trying to solve a catastrophe of its own making.

“Minister Dreeshen told hundreds of workers that they were OK in August, that they would lose their jobs in September, and now in October that they’ll be OK until Christmas. Maybe. These are real people, Minister Dreeshen, and they deserve better from you,” said Nenshi.

Nenshi said financial penalties for cancelled contracts will still cost taxpayers and called for a full public accounting.

As for the city’s previous vision for the Green Line, Gondek told reporters Thursday it is still being wrapped up.

“That project is over. That project was terminated on Sept. 3 when we heard from the province of Alberta that they didn’t wish to carry on with that alignment. This is a new project,” said Gondek.

The final bill for the wind-down remains to be seen, and it’s unclear how spending in the interim might be limited, she said.

“For now, we’re progressing work on an LRT that’s much needed in our city,” she said.

The federal government, which also committed to putting $1.53 billion into the previous iteration of the Green Line, will need to weigh in on whatever the new alignment might be.

The Calgary Construction Association welcomed Thursday’s announcement, saying it gets the project back on track.

“The Green Line LRT is essential not only for connecting hundreds of thousands of Calgarians but also for driving job creation and economic growth in our city,” said president and CEO Bill Black in a statement.

This report by The Canadian Press was first published Oct. 10, 2024.

The Canadian Press. All rights reserved.



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