Petro-Canada scraps oil sands auction
Petro-Canada has removed a “for sale” sign from five Alberta oil sands properties after an international auction fell short of the value it placed on the combined resource of about 1.7 billion barrels of bitumen.
The company said Feb. 6 that the “sale process attracted considerable attention from North American and international companies; however, the bids received did not meet Petro-Canada’s expectations.”
Neil Carmata, senior vice president of oil sands, said Petro-Canada might consider selling the “high-quality” assets at a future date “if the price is right.”
Analysts had estimated a sale could generate C$850 million to C$1.7 billion based on earlier oil sands transactions. But they had also cautioned that attaching a value to the properties was difficult because they were minority interests in several leases and had no obvious upgrading solution.
There had been speculation that Norway’s Norsk Hydro and Statoil, which are engaged in a merger, might take the chance to gain an oil sands foothold, or one of China’s state-owned companies might build on their existing interests.
Whether the failure to pull off a deal indicates a softening of the oil sands asset market will be clearer once responses are known to other offerings from Suncor Energy, OPTI Canada-Nexen and Koch Exploration Canada.
—Gary Park
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