Norwegian energy company Statoil ASA (STO) agreed Monday to sell 40% of its interest in Alberta, Canada-based Kai Kos Dehseh oil sands project to Thailand's PTT Exploration and Production (PTTEP) for about US$2.28 billion. The transaction, which has an effective date of January 1, 2011, is expected to close in the first quarter 2011, subject to customary Canadian regulatory approvals.
"This transaction underlines the quality of our Canadian resources and demonstrates our ability to create value as an oil sands operator. We look forward to forming a strong partnership with PTTEP in the further development of our Canadian oil sands assets," Statoil CEO Helge Lund said in a statement.
PTTEP, 65% owned by PTT Public Co. Ltd. (PTT), is Thailand's sole petroleum exploration and production company with a market capitalization of US$20 billion. PTTEP is one of the top ten publicly listed companies in Thailand.
Statoil is an international energy company with operations in 34 countries, building on more than 35 years of experience from oil and gas production on the Norwegian continental shelf.
Statoil retains 60% interest in the Kai Kos Dehseh project and is the managing partner and operator of the project, with production volumes being handled and marketed by Statoil Canada Ltd.
Statoil's decision to trim its position in the oil sands stems from other recent transactions designed to optimize the risk and strategic profile of its global portfolio.
In 2007, Statoil acquired 100% of the shares in North American Oil Sands Corp. (NAOSC) and operatorship of the Kai Kos Dehseh leases. It owns interests in 279,053 net acres of oil sands' leases located in the Athabasca region of Alberta.
Since the acquisition, Statoil has invested to construct project facilities and related infrastructure at the Leismer demonstration project, which is the first phase and will produce 10,000 barrels per day of Bitumen.
The Kai Kos Dehseh project initiated steam injection on September 3, 2010, a month ahead of schedule, and is anticipated to move into production phase during the first quarter of 2011.
The Canadian oil sands represent one of the world's largest oil resources and is expected to play an increasingly important role in the global energy mix.
The Kai Kos Dehseh project envisages production of 220,000 barrels of bitumen, heavy viscous oil, using the steam-assisted gravity drainage method or SAGD, from a depth of about 430 meters, with an average producing zone thickness ranging from 15 to 30 meters. The project is located near Conklin, Alberta.
Meanwhile, Statoil presented earlier this year a technology plan aimed at increasing value through enhanced production and reducing carbon emissions and energy use.
"PTTEP fully shares our ambitions in relation to efficient and responsible operation and development of our Canadian oil sands assets. Our new partnership is committed to utilizing the best available technology in order to both minimize environmental impact and enhance value as we further develop Kai Kos Dehseh," Lund added.
STO closed Monday's regular trading session at $20.79, down $0.42 or 1.98% on a volume of 1.82 million shares, higher than the three-month average volume of 1.61 million shares. In the past 52-week period, the stock has been trading in a range of $18.39 to $26.68.
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