Brian Frank: BP takes upbeat view of Western Canada

Gary Park

Petroleum News Calgary correspondent

BP Canada Energy has no plans to bail out of the Western Canada sedimentary basin, despite a decision to seek buyers for some E&P assets in western Alberta, the new company president, Brian Frank, said in pre-Christmas interviews.

“We’re not for sale and we don’t intend to exit the basin,” he told The Canadian Press.

Frank said returns from BP’s base business in Canada are stacking up well against its global portfolio, while opportunities to grow are constantly being evaluated.

To that end, he emphatically ruled out any prospect of BP joining Marathon Oil, Murphy Oil, El Paso and ChevronTexaco in putting its Western Canadian holdings on the block.

However, BP has retained Waterous & Co. as its exclusive adviser to sell certain non-strategic assets that had 2003 production of 18 million cubic feet of gas per day and 1,065 barrels of conventional oil and gas liquids per day from five operating areas.

Current gas output is 560 million cubic feet per day, just over half BP’s industry-leading volumes before its parent company merged with Amoco in 1999. Since then the Canadian staff has been reduced by about one-third to 1,400.

While acknowledging the shrinking conventional prospects in the Western Canada basin, Frank listed the growth opportunities as tight gas, coalbed methane and frontier plays — notably for BP in the Mackenzie Delta, where it partnered with Chevron Canada Resources and Burlington Resources Canada last winter in a successful gas well.

Although a strong believer in the Delta’s potential, Frank told the Financial Post that he is hoping for more flexibility in the design of the proposed Mackenzie Valley pipeline to reflect the chances of exploration success over the next couple of years.