French TotalEnergies plans to spin off its oil sands business in Canada and list the new company on the stock exchange as it no longer fits with its strategy, which now has a focus on low-carbon energy, the company said at an investor presentation.
“We are not the best shareholder of these assets because as we have a climate strategy, we don’t want to invest in these assets,” chief executive Patrick Pouyanne said, as quoted by Reuters.
Pouyanne noted that the oil sands assets the company operates in Canada are expected to generate some $1.5 billion in cash flow this year.
The French supermajor recently issued an update on its strategy for the future, noting how its focus on low-cost oil and gas projects and a strong expansion of its LNG operations have put the company in a favorable position in the current energy market context.
TotalEnergies also boasted that its low breakeven cost per barrel of oil, at $25, has enabled it to generate additional cash flow from every barrel it produces, to the tune of $15 billion as of this year.
Yet a lot of TotalEnergies’ plans for the future have to do with electricity and more specifically renewable electricity, in a marked departure from what has been its core business for decades. The French supermajor is among the most active “transformers” in the energy industry, eyeing to become one of the five biggest renewable energy providers in the world.
In line with its transformational plans, TotalEnergies has been in the process of pulling out of Canada. In 2020, the company took an impairment of $7 billion based on its estimates of oil prices in the period 2020-2023. The company also said that year it expected oil demand to peak by 2030.
