BP plc (ADR) (BP) & This Major Challenge

And TOTAL S.A. (ADR) (NYSE:TOT) last month announced it would sell its 49% stake in its Canadian oil sands project to Suncor Energy Inc. (USA) (NYSE:SU) , netting the French oil major a colossal $1.65 billion loss on the project. High labor costs, as well as an undersupply of workers and depressed prices for Canadian oil sands crude, are the main reasons Total decided to abandon the project.

With the era of “easy oil” now a relic of the past, oil majors are venturing into deep, uncharted territories in search of oil. But as BP plc (ADR) (NYSE:BP)’s Mad Dog 2 illustrates, many of these unconventional projects are plagued by cost overruns and delays. Hence, BP and other oil majors are finding it more difficult to boost production, despite spending tons of money of new development projects.

The article BP’s Mad Dog 2 Highlights Big Challenge for Oil Majors originally appeared on Fool.com is written by Arjun Sreekumar.

Motley Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool recommends Chevron and Total SA.

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