Teck Resources (NYSE: TECK), one of Canada's largest and most diversified miners, recently announced that it was dropping its plan to build a $20 billion oil sands project. That decision, however, came well before oil's precipitous drop in March following the price war between OPEC and Russia. Far from a prescient move, there were bigger reasons for the call to hold off on what was once expected to be a big earnings driver for the commodity company.
The interesting thing about Teck and oil is that the company has already been in the industry since the successful start up of the Fort Hills oil sands operation a few years ago. It owns roughly 21% of this project, with the rest owned by oil sands specialist Suncor Energy (roughly 54%) and French energy giant Total (the rest). The project has a capacity of around 200,000 barrels of oil a day. But oil sands are very different from what most people envision when they think about producing oil. For one thing, oil sands are mined, not drilled. There is no well; instead, there is a facility that processes dug-up, oil-laden earth to extract so-called "black gold."
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Source: Motley Fool
(March 14, 2020 - 7:29 AM EDT)
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