Shell, ConocoPhillips oil sands share selloff risks flooding market
By Nia Williams
CALGARY, Alberta (Reuters) - Canadian equity markets risk being swamped with oil sands company shares this year as Royal Dutch Shell (RDSa.L: Quote) and ConocoPhillips (COP.N: Quote) prepare to offload C$6.8 billion ($5.1 billion) worth of stakes in two domestic producers, just months after acquiring them.
Sources told Reuters on Tuesday that Shell has decided to sell its C$4.1 billion stake in CNRL while ConocoPhillips has said it is not a long term investor in Cenovus.
The plans to flip the stakes within months of acquiring them is raising fresh doubts about investor confidence in the world's third-largest crude reserves. Shell's decision to sell is a "surprise and not immaterial" to CNRL, a source familiar with CNRL's thinking said. The Canadian producer declined to comment on Wednesday.
Shell owns roughly 8.8 percent of CNRL and has not said whether sales would be done via public offering or IPO.
Foreign companies have sold $22.5 billion worth of Canadian oil sands assets this year alone, due to depressed global crude prices, high operating costs and limited pipeline access to market.
The latest planned stake sales are more gloomy news for a region struggling to compete with cheap U.S. shale plays.
With Canadian producers spending heavily this year on buying up the fleeing majors' assets, there is also a limited list of potential domestic buyers for the sale. Continued...