Nexen may sell gas, power marketing businesses

Thu Jul 23, 2009 7:48pm EDT
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Nexen Inc may sell its natural gas and power marketing units as part of a strategic review aimed at further reducing the financial risk in its overall operations, it said on Thursday.

Nexen, Canada's No. 4 independent oil explorer, said it hired an adviser to help it determine what to do with those businesses, which have been realigned to reduce the speculative trading that had created volatility in its financial results.

"We addressed that in the back part of last year and into this year, so a lot of the risk is gone and is behind us," Nexen Vice-President Michael Harris said.

"Now we look at it and say: Where do we want to go with this?"

Nexen's production is weighted 85 percent to crude oil and the remainder to natural gas, but its marketing activities have been opposite to that, Harris said.

He said the company does not have an idea of value for the units yet or an indication of third-party interest.

"This is Day 1. We'll have to go through the process and see what comes out of the strategic review," Harris said.

According to Nexen's website, its natural gas marketing business its one of the top 10 in North America, trading more than 6 billion cubic feet a day. It also manages more than 50 billion cubic feet of gas storage capacity.   Continued...