VANCOUVER — The Alberta's government's decision last week to end its oil production curtailment program in December will help advance a plan by Teck Resources Ltd. to sell its stake in the Fort Hills oilsands mine, says CEO Don Lindsay.
But the Vancouver mining company won't put its 21.3 per cent interest in the project operated by partner Suncor Energy Inc. on the block until the mine demonstrates again the operational strength it showed after startup of an expansion in 2018, he said on a conference call on Tuesday.
"There's some consolidation going on in the sector, so you can assume conversations are taking place," Lindsay told analysts.
"But I wouldn't anticipate that we'd see anything in the near term, not until we've been able to ramp up and demonstrate what the asset can do."
Lindsay has said the Fort Hills stake is not considered core for Teck and it will try to sell it if its value is not reflected in Teck's share price.
Production at the 194,000-barrel-per-day oilsands mine has been throttled back because of the Alberta quotas introduced in early 2019. Early this year, Suncor shut down one of its two production trains because of low oil prices.
The train was restarted in September to take the mine back to overall production of between 120,000 and 130,000 bpd.
Teck announced Tuesday it earned a profit attributable to shareholders of $61 million or 11 cents per diluted share for the quarter ended Sept. 30.
The result compared with a profit of $369 million or 66 cents per diluted share in the same period a year earlier.
Revenue for the quarter totalled $2.29 billion, down from $3.04 billion in the same quarter last year.
Teck reported its realized price for steelmaking coal fell 35 per cent to US$102 per tonne from US$156 in the third quarter of 2019, while volumes slipped to 5.1 million tonnes from 6.5 million as demand fell due to the COVID-19 pandemic.
It said work on its Neptune Bulk Terminals expansion project in the Port of Vancouver was safely restarted in September after a five-month shutdown.
— By Dan Healing in Calgary.
This report by The Canadian Press was first published Oct. 27, 2020.
Companies in this story: (TSX:TECK.B, TSX:TECK.A)