UPDATE 1-Petro-Canada joins UTS Energy oil sands project
Tue Mar 1, 2005 06:49 AM ET
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NEW YORK, March 1 (Reuters) - Petro-Canada (PCA.TO: Quote, Profile, Research) , Canada's No. 4 oil producer and refiner by market value, on Tuesday said it was joining the Fort Hills oil sands mining project owned by UTS Energy Corp (UTS.TO: Quote, Profile, Research) .
Under the agreement, approved by the boards of both companies, Petro-Canada will own 60 percent and operate the Alberta project while UTS will own the other 40 percent.
To pay for its stake, Petro-Canada will fund 75 percent of UTS's share of the next C$1 billion of development capital, or C$300 million.
Calgary-based UTS bought into the Fort Hills project last year, bought out its U.S. partner, and started scouting for a partner to help fund its development.
Current plans calls for an initial mining development producing 50,000 barrels per, day but further development could expand production up to 190,000 barrels a day of bitumen.
With Petro-Canada's involvement, the partners will now consider a range of options including a 100,000 barrels per day initial mining operation before finalizing the development plan.
Petro-Canada said the partnership fit well with its strategy of adding more long-life assets to its portfolio and built on its oils sands plans and capabilities.
The deal is subject to government and regulatory approvals. |
