Athabasca Oil deal clears way for oil sands project, shares jump

Fri Feb 21, 2014 3:17pm EST
 
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CALGARY, Alberta Feb 21 (Reuters) - Athabasca Oil Corp said on Friday it reached an agreement with an aboriginal group in Alberta, Canada, that will clear the way for a 250,000 barrel-per-day oil sands project and for the company to sell its share of the site to its Chinese partner for C$1.32 billion ($1.2 billion).

Athabasca's shares rose 12 percent after news of the agreement was released.

The company said the Fort McKay First Nation, a community of about 700 north of Fort McMurray in the heart of the Athabasca oil sands region, has agreed to waive all its objections to the Dover Commercial Project operated by Brion Energy Corp, a joint venture between Athabasca and PetroChina.

The Fort McKay First Nation had appealed the Alberta Energy Regulator's approval in April of the Dover Commercial Project, a thermal oil sands development, after it rebuffed the First Nation's request to set a buffer zone around an area it considers a key wildlife and fish habitat.

The project is now awaiting final approval from Alberta's cabinet. When the approval is in hand and Alberta issues a final permit, Athabasca will have the right to sell its stake in the project to PetroChina, said Andre De Leebeeck, a spokesman for Athabasca.

Athabasca shares were up 92 Canadian cents to C$8.76 by late afternoon on the Toronto Stock Exchange.

($1 = 1.1127 Canadian dollars) (Reporting by Scott Haggett; Editing by Lisa Shumaker)