French colossal fossil Total sent a shockwave through the Alberta oilpatch Wednesday with the announcement that it is writing off C$9.3 billion in assets in the tar sands/oil sands, including $7.3 billion in the Fort Hills mine, which opened just 2½ years ago, and the Surmont thermal oilsands project.
Total is also cancelling its membership in Canada’s pre-eminent fossil lobby group, the Canadian Association of Petroleum Producers (CAPP), and giving up on just over $1 billion in liquefied natural gas (LNG) investments in Australia, The Canadian Press reports.
Oil refinery plant at night
After adjusting its expectations for future oil prices, Total concluded “that the weakness of investments in the hydrocarbon sector since 2015, accentuated by the health and economic crisis of 2020, will result by 2025 in insufficient worldwide production capacities and rebound in prices,” the company said in a release. “Beyond 2030, given technological developments, particularly in the transportation sector, Total anticipates oil demand will have reached its peak,” and benchmark oil prices will hold in the range of US$50 per barrel.
From that starting point, and “in line with its new Climate Ambition announced on May 5, 2020, which aims at carbon neutrality, Total has reviewed its oil assets that can be qualified as ‘stranded’, meaning with reserves beyond 20 years and high production costs, whose overall reserves may therefore not be produced by 2050,” the release continues.
“The only projects identified in this category are the Canadian oil sands projects Fort Hills and Surmont.”
Read more: The Energy Mix