ConocoPhillips seeks partner for oil sands assets

Mon Jan 16, 2012 2:17pm EST
 
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - ConocoPhillips (COP.N: Quote) 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, the U.S. oil major said on Monday.

ConocoPhillips has retained Scotia Waterous to run the offering of a share in six Alberta properties that currently produce 12,000 barrels a day from an estimated 30 billion barrels of bitumen in place. It is doing so as interest in Canadian energy assets booms, especially from Asian buyers.

Tim Bryant, vice-president of ConocoPhillips' Canadian division, declined to say how much the company wants for the holdings, other than to say it would be in the billions of dollars rather than millions.

"It's substantial. These are world-class trophy assets," he said.

The one producing project in the package is Surmont, run in a joint venture with France's Total SA (TOTF.PA: Quote). Located south of the oil sands hub of Fort McMurray, Alberta, the steam-driven development pumps about 25,000 barrels a day. The partners are working to boost that to 136,000 bpd, starting in 2015.

The other properties are the Thornbury, Clyden, Saleski, Crow Lake, McMillan Lake assets. The land totals 715,000 acres.

It is difficult to put a potential value on a deal with the information currently available, CIBC World Markets analyst Andrew Potter said. "They give a bitumen-in-place number, but you have no idea how that's attributed by different property," Potter said.

The Houston-based company, in the process of splitting its worldwide production and refining assets into separate companies, is offering the assets at a time when investments in oil sands are piling up, especially from Chinese and other Asian companies.   Continued...