Thailandís PTT has put off plans to develop its Mariana oil sands project in Canada due to weak oil prices, and booked its third impairment on the project in three years, taking total writedowns on it to $1.8 billion.
The Thai groupís 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, fell 4.9 percent on Friday morning.
PTTEP said late on Thursday it would delay a final investment decision on the project in Alberta and record an impairment of $550 million in its third-quarter earnings. The losses would not impact cash flow but would hurt earnings, a Trinity Securities analyst said on Friday.
PTTEP previously booked impairments of $626 million in 2015 and $640 million in 2014 on the Mariana project, which it first bought into in 2010 for $2.3 billion and fully took over in 2014.
The latest adjustment on the project reflected low oil prices, according to an analyst from Krungsri Securities. The delay fits with PTTís strategy of focusing more on liquefied natural gas (LNG) capacity and gas assets.
PTTEP had cash of 143 billion baht ($4.32 billion) as of June this year marked for acquisitions to build up reserves and participate in the auctions of gas fields in the Gulf of Thailand later this year. It is also expected to announce a final investment decision on its Mozambique Rovuma Offshore Area 1 Project by year end.