Thailand-based PTTEP cancels plan to develop Mariana oil sands project, final decision on Alberta investment still to come.
The oil sands have been hit with more bad news. Thailand-based PTT Exploration and Production (PTTEP), has cancelled plans to develop their Mariana oil sands project. They have now taken writedowns equaling $1.8 billion USD on the project.
As noted by BNN, “The Thai group’s decision marks the latest blow to the oil sands industry in Canada, where dozens of projects have been shelved due to high start-up costs and low oil prices. Shares in PTT Exploration and Production Pcl (PTTEP), the upstream arm of PTT Group PTT.BK, fell 4.9 per cent on Friday morning.”
Impact of low oil prices made worse by government policy
The fact that BNN points to both “high start-up costs and low oil prices,” is important. Lower oil prices make it tougher for oil sands projects to go through, but that’s not the only reason projects are getting delayed or scrapped. If taxes were low and regulations eased, it would be far more affordable to begin oil sands projects and make a profit – even with lower prices. Yet, both the Trudeau and Notley governments are doing the opposite, slamming the oil sands with new regulations, new taxes, and more and more bureaucracy. As a result, it’s tougher and tougher to overcome low oil prices, and that’s having a devastating impact on the sector.