Total writes down US$7bn of Canadian oil sands assets
Total will take an US$8.1bn impairment on the value of its assets, including US$7bn on Canadian oil sands assets alone. The French company, which sharply lowered its short-term price scenario, recognised an US$2.6bn impairment charge in the second quarter of 2020, mainly on Canadian oil sands assets (for US$1.5bn) and on LNG assets in Australia (for US$0.8bn). In addition, Total wrote off a further U$5.5 billion in the value of its Fort Hills and Surmont Canadian oil sand projects after cutting its long-term price. These oil sands projects are considered as "stranded", i.e. whose reserves may not be produced by 2050 owing to high production costs.
The company will stop investing in Canadian oil sands assets and will withdraw from the Canadian Association of Petroleum Producers (CAPP). Consequently, the move will reduce the proved and probable reserves life of Total from 19 to 18.5 years.
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