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Petro-Canada puts oil sands leases on block
Gary Park For Petroleum News
Petro-Canada is auctioning five oil sands properties that contain an estimated 1.7 billion barrels of bitumen reserves and could raise C$850 million to C$1.7 billion.
But it’s not a sign that the major Canadian company is having second thoughts about its heavy commitment to northeastern Alberta where it has a 55 percent operator role in the huge Fort Hills project, is outright owner of the MacKay River and Lewis leases and holds 75 percent of Meadow Creek.
Its grand plan includes bringing Fort Hills on stream in 2011, with regulatory approvals for 190,000 barrels per day of production and growing the operation to 350,000-400,000 bpd by 2015.
Neil Carmata, Petro-Canada’s senior vice president of oil sands, said the properties for sale are “very attractive” assets, but were always on the long-term development agenda.
Over the next 10 years the focus will be on Fort Hills and the other three leases.
Five properties on block The five properties on the auction block are Chard, Stony Mountain, Liege, Thornbury and Itpiatik.
The data room was opened to prospective bidders Nov. 20 in a sale being managed by London-based Harrison Lovegrove, giving it a chance to capitalize on the growing global interest in the oil sands.
Over the past two years interests from China, South Korea and France have entered the oil sands region, while Italy’s Eni, Norway’s Statoil and India’s state-owned companies have indicated they are looking for a point of entry. In addition Royal Dutch Shell has invested heavily in a range of properties.
UBS analyst Andrew Potter said in a research note the price parameters are likely to be in the range of 50 cents to C$1 per barrel.
“We believe this asset sale is significant in that it will not only provide a reasonable cash inflow, but it will also provide a floor value for (the other assets,” he said.
A pointer to what Petro-Canada can expect is likely to come before the end of 2006 when Talisman Energy hopes to close a deal that could raise C$1 billion from the disposal of its oil sands holdings.
Its offerings include two steam-injection properties with resources roughly estimated at 600 million to 1.25 billion barrels, plus a 1.25 percent stake in the giant Syncrude Canada operation that majority owner Canadian Oil Sands Trust said it wants to buy.
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