Europe's third largest oil firm, Total SA is reporting a US$1.65 billion loss for the cancelled Voyageur Upgrader project in Canada. The oil sands project was sold at a loss to Suncor Energy Inc.
In a statement, the French oil company said that the US$5 billion investment in the project is 'no longer justified from a strategic and economic point of view'. The Paris based company is selling its 49% shareholdings to its venture partner Suncor for just US$500 million.
The decision was precipitated by increasing labor costs and shortage of workers together with the declining price of Canadian heavy crude due to increased output from its neighbor, the United States.
Suncor cancelled the venture after CEO Steve Williams said that the profit margin was 'disappearing' for the processed bitumen from Alberta.
Total's CEO Christophe de Mergerie vowed to raise production from new fiields to cover the losses as well as seek out more reserves to make up for the shortfalls from this cancelled project.
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