ConocoPhillips' Q4 2023 oil sands production breaches investment exclusion thresholds

6 minute read

ConocoPhillips Q4 2023 results confirm 6.6% of current production comes from oil sands, which could lead to potential investor exclusions.

ConocoPhillips’ 2023 results, released on 8 Feb 2024, disclose production details post completion of its acquisition of the Surmont Oil Sands field. Its Q4 figures show 6.6% of production and estimated 5.0% of revenue come from oil (or tar) sands. These are the best representation of the company’s current production, and breach an often-used exclusion threshold.

Full-year 2023 figures are lower, 4.4% and 3.4% respectively. This means, it may be another year before full-year figures breach the 5% threshold, which would then feed a review by data providers, which could initiate a review by investor ESG committees. This process may leave investors financing undesirable oil sands production for up to two years.

The acquisition was funded by a $2.7bn three-tranche deal in Aug 2023. The performance of these bonds shows an average spread tightening of 12% since issuance, however the Bloomberg US Agg Corporate has tightened 21% over the same period. This suggests benchmarked investors in these bonds may have underperformed.

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