Oil Companies Return Nearly 2.5 Million Acres Of Tar Sand Leases To Canadian Government
In another sign the bloom is off the boom for the oilsands, the industry has returned almost one million hectares of northern Alberta exploration leases to the province over the past two years — abandoning an area far bigger than P.E.I.
The total area covered by oilsands leases remained constant at about nine million hectares between 2011 and 2014. But it fell to 8.5 million hectares in 2015 and 8.1 million in 2016, following the crash in world oil prices from over US$100 to under $60 per barrel in 2014.
Most of the returned acreage either represents expired or surrendered leases, according to Alberta Energy, which provided the statistics at the request of The Canadian Press.
Observers were surprised by the size of the lease returns which they attributed to industry cost-cutting and disinterest in spending to develop new prospects when there’s no money to build projects already on the books.“It costs money to maintain these lands,” said Brad Hayes, president of Petrel Robertson Consulting in Calgary.“You can’t convince shareholders to continue to put that money out if there’s no prospect for success.”
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