Thailand's state oil producer, PTTEP, plans to speed up development of its Canadian oil sands assets once an agreement to split up a multibillion-dollar partnership with Statoil ASA is finalized, the company says.
PTTEP and Norway's Statoil said last week they will carve up their Kai Kos Dehseh joint venture in northern Alberta in a deal with would give the Bangkok-based company 100-per-cent ownership of three undeveloped leases: Thornbury, Hangingstone and South Leismer. Statoil will assume full control of the producing Leismer project and the next one that is set for construction, called Corner.
As a top-up, Statoil will pay PTTEP $200-million (U.S.), plus a working-capital adjustment estimated at $235-million. The move is aimed at allowing the companies to develop their projects at their own paces.
"In 2014, PTTEP plans the preliminary front-end engineering and design for the first production phase of the Thornbury field, as well as the preparation for seismic acquisition and drilling campaigns scheduled for 2014-2015," spokesperson Vanduan Vijintanasarn said in an e-mail.
The statement shows the Thai company is not deterred from its three-year-old oil sands ambitions by rising costs, volatile prices for Canadian bitumen and uncertainty over the industry's ability to boost pipeline capacity for exporting the crude to more lucrative overseas markets.
According to an Alberta government report from last autumn, the Thornbury field would produce 40,000 barrels of bitumen a day. An expansion phase would add 20,000 barrels a day.
Hangingstone and South Leismer would produce 20,000 barrels a day each. No startup date is listed in the report for any of the projects, which like the initial Leismer project, would likely be developed employing steam-assisted gravity drainage technology.
PTTEP has applied to Ottawa to approve the agreement under recently tightened rules for oil sands acquisitions by foreign state oil companies. It is the first such test of the framework, which Prime Minister Stephen Harper announced in late 2012.
David Woollcombe, a lawyer with McCarthy Tétrault in Toronto who specializes in mergers and acquisitions, told The Globe and Mail last week that it is unlikely the government will reject the application as the deal would not result in an increase in overall foreign ownership in the oil sands.
PTTEP bought a 40-per-cent stake in the Kai Kos Dehseh assets for $2.3-billion in 2011.