Majors exit Western Canada’s conventional fields

Gary Park

It’s being called the maturing of Canada’s traditional oil patch.

By year’s end, practically all of the major companies that have dominated Western Canada’s conventional oil and natural gas industry will have unloaded their assets as they refocus on deep gas plays, the oil sands, the East Coast and the Arctic.

Petro-Canada is the latest to join the exodus. It has placed C$500 million of properties up for sale, joining BP Amoco Canada (which made a C$1.6 billion sale to Canadian Natural Resources and Penn West Petroleum in August) and Shell Canada (which sold its conventional western operations to U.S.-based Apache for C$770 million in September).

“What Petro-Canada is doing is redeploying capital — taking it out of mature assets and investing it in areas that are still considered growth areas,” said Wilf Gobert, an analyst with Peters & Co. in Calgary.

Petro-Canada chief executive officer James Stanford said the company’s main source of future oil will be the East Coast, followed by a C$200 million oil sands lease in northern Alberta, its 12 percent stake in the Syncrude Canada oil sands operation and natural gas.

But the jewels it has put on the block are far from bargain-basement offerings. They produce 17,200 barrels per day of oil and 18 million cubic feet of gas.