CALGARY, Alberta (Reuters) - The Alberta government will decide before the end of May which companies will take over contracts to market the Canadian province’s crude, a spokesman said on Tuesday, after principal marketer Nexen Energy decided to shut down worldwide trading operations.
Nexen Energy, a wholly owned subsidiary of China’s CNOOC Ltd, is closing its crude oil trading division as the company cuts jobs in response to plunging global oil prices.
Since June 2013 Nexen has managed and marketed roughly half the 70,000 barrels per day of conventional crude that the province of Alberta receives in lieu of cash royalties.
Shell Trading Canada, a unit of Royal Dutch Shell, markets 40 percent of the volumes and the Alberta Petroleum Marketing Commission sells the remaining 10 percent directly.
Alberta Energy spokesman Chris Bourdeau said the marketing contracts were up for renewal anyway by June 1, but Nexen had submitted a bid to be part of the process back in November.
“We were certainly surprised when Nexen made their announcement, it’s been a good working relationship with them,” Bourdeau said. “They put their name forward and then withdrew.”
Nexen has been marketing Alberta royalty barrels since 2007.
Bourdeau said a “fair number” of other companies had submitted bids to market the crude but declined to give names or a specific number.
The Alberta government has the choice to collect either barrels of oil or cash as royalty payments from producers within the province, which is home to the world’s third-largest energy reserves after Saudi Arabia and Venezuela.
Editing by Richard Chang