News wire — Canada’s excessively long regulatory process led to cancellation of Teck Resources’ Frontier oil sands project, the chief executive of rival Husky Energy said on Thursday.
Teck on Sunday canceled the C$20.6 billion ($15.51 billion)proposal, saying it was stuck in an unresolved Canadian debate about energy growth and environmental concerns.
Regulatory reviews should not exceed five years, Husky CEO Rob Peabody said on a quarterly call. Frontier was reviewed for nine years.
“What killed Teck ultimately was a regulatory process that just went on and on and on,” Peabody said. “Had that process concluded in a sensible timeframe, I’m sure we’d have a Teck project under construction today.
“The No. 1 thing we need to address is around the regulatory process to tighten up timeframes and put more certainty in it, while not giving away requirements that projects meet very high standards.”
A Canada-Alberta regulatory panel endorsed Frontier last year, and Prime Minister Justin Trudeau’s cabinet was scheduled to make a final decision this week before Teck pulled out. The project also required higher oil prices, a partner and more Alberta pipelines to proceed, according to Teck.
A new process for assessing projects implemented by Trudeau’s government will cut timelines, boost transparency and protect the environment, said Moira Kelly, spokeswoman for Environment Minister Jonathan Wilkinson.
A Teck spokesman declined to comment.
Husky took a C$2.3 billion ($1.73 billion) charge for the fourth quarter, saying it expected oil prices to stay low long-term.
Its shares dropped 5.7% to C$6.74 in Toronto, paring earlier losses that included the lowest price in 19 years.
The company said the impairment charges on assets also reflected a drop in capital spending.
Global oil prices have sagged on over-supply concerns since 2014, and the spread of coronavirus has added further pressure. North American futures plunged 4.9% on Thursday, touching the weakest price in nearly 14 months.
This month, rival Suncor Energy took a C$2.8 billion writedown on expectations of heavy oil prices remaining low for the foreseeable future.
Calgary-based Husky, majority-owned by Hong Kong tycoon Li Ka-shing, said in December it would cut capital spending by C$500 million over the next two years, at a time when oil producers face pressure to return cash to shareholders.
Husky reported a net loss of C$2.3 billion in the fourth quarter, compared with net earnings of C$216 million a year earlier.