(Reuters) - ConocoPhillips (COP.N), 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) 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.
“It’s a mix of stuff we have and it appeals to buyers in different ways, Lance said in an interview.
The planned oil sands stake sale is part of the company’s effort to reduce exposure to higher cost projects to free up funds for shale development, Lance told analysts attending the company’s analyst meeting in New York.
Oil and gas companies including Conoco are spending billions to increase crude oil output from lower-cost and stable basins in North America and other parts of the world.
Houston-based Conoco has promised investors that its production, margins, cash flow and dividend will grow over five years, helped by higher output of crude from places like the Eagle Ford formation in South Texas.
Conoco also said it is looking to sell some of its 37.5 percent 37.5 percent interest in the Australia Pacific LNG project with Origin Energy (ORG.AX) and China’s Sinopec (600688.SS). Earlier this month, Origin raised APLNG’s cost estimate 7 percent to $25.4 billion.
Shares of Conoco rose 5 cents to $58.09 in afternoon New York Stock Exchange trading.
Reporting By Anna Driver; Editing by Gerald E. McCormick, Marguerita Choy and Sofina Mirza-Reid