Conoco CEO says Canada deal landscape is changed

Thu Feb 28, 2013 3:43pm EST
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By Anna Driver

(Reuters) - ConocoPhillips (COP.N: Quote), which has been looking to sell down its interest in Canada's oil sands said that moves by Ottawa to limit foreign investment in that country's resources have made it more difficult for some buyers, the chief executive said Thursday.

In December, Canada put in place new rules limiting control of its oil sands by foreign state-owned companies who would like to own more than a minority stake in a project.

The changes followed the contentious takeovers of Canadian energy producers Nexen Inc NXY.TO and Progress Energy Resources Corp (PRQ.TO: Quote) by Chinese and Malaysian state-owned companies.

The complexity and size of Conoco's oil sands projects in Western Canada have prompted the Houston-based oil major to take its time finding the right partner, Conoco Chief Executive Officer Ryan Lance told Reuters. But he added Canada's new rules have changed the landscape for investment.

"I just think we need to be cognizant and aware of the current lay of the land, the politics that are up there," Lance said.

"Certain kinds of buyers and certain kinds of deal structures may have a more difficult time in Canada as a result of the investment Canada decisions that came through the Progress deal with Petronas and through the CNOOC deal with Nexen," the executive said.

Last January, Conoco said it is seeking a buyer for 50 percent of a large portion of its Canadian oil sands holdings, assets that could eventually produce more than half a million barrels a day.

Conoco also has 50 percent interest in the Surmont, Foster Creek and Christina Lake oil sands projects in Alberta.   Continued...

ConocoPhillips Chairman and Chief Executive Officer Ryan M. Lance (2nd R) rings the closing bell at the New York Stock Exchange (NYSE), February 27, 2013. REUTERS/Brendan McDermid