In a significant move poised to reshape the Canadian oil landscape, Canadian Natural Resources Ltd. (CNRL) has inked a blockbuster agreement to purchase a substantial portfolio of oil and gas assets from Chevron Canada Ltd. for a staggering US$6.5 billion. This acquisition is set to bolster CNRL's operations and establish it further as a dominant force in the Alberta oil sector.

Among the crown jewels of this deal is Chevron's 20% stake in the Athabasca Oil Sands Project, which encompasses not only the Muskeg River and Jackpine mines but also the Scotford Upgrader and the advanced Quest Carbon Capture and Storage facility. Once completed, this acquisition will elevate CNRL's interest in these pivotal operations to an impressive 90%.

CNRL President Scott Stauth has expressed confidence in this acquisition, describing it as a “unique buy” that will enhance the sustainability of the company’s oil sands mining and upgrading capabilities. He notes that the deal is projected to escalate production by approximately 9% by 2025, equivalent to an additional 122,500 barrels per day. Furthermore, CNRL will see an increment of around 1.448 billion barrels in its total proved and probable reserves, all while keeping additional operational costs at bay.

“This is a very attractive acquisition for us,” stated Mr. Stauth, emphasizing the potential for “significant production” growth, especially in CNRL’s Horizon oil sands mining and upgrades. He hinted at the possibility of establishing a stand-alone development facility in the future, albeit with considerable capital investments.

Additionally, the agreement will facilitate savings close to $40 million annually for CNRL by streamlining contractor use, enhancing purchasing power, sharing equipment, and minimizing transport costs for liquids. Stauth assured stakeholders that CNRL is committed to maximizing the value derived from these properties over the long term.

In a notable expansion of its portfolio, CNRL will also be acquiring Chevron's 70% operated interest in light crude oil and liquids-rich assets located in the Duvernay play, which is situated about 260 kilometers northwest of Edmonton. This all-cash deal has an effective date of September 1, 2024, with the closing anticipated in the fourth quarter of 2024, pending regulatory approval and standard closing conditions.

As a sign of confidence in its financial health, CNRL plans to increase its quarterly dividend by 7% to 56.25 cents per share, starting with the January 2025 disbursement. This announcement marks the company’s 25th consecutive year of dividend increases.

This acquisition unfolds in the backdrop of Chevron’s recent decision to pursue stronger positions in the market, including the pending acquisition of Hess Corp. for US$53 billion, which has faced scrutiny and legal challenges.

This latest venture adds to CNRL’s history of strategic acquisitions; last year, the company spent $482 million to acquire a remaining 50% interest in the Pike oil sands lease from BP and acquired land within the Montney shale play in northwestern Alberta.

With this high-stakes move, Canadian Natural Resources is not just expanding its reach; it is potentially setting the stage for a new era of growth and innovation in Alberta's oil and gas sector! Stay tuned for more updates as this story unfolds!