Cenovus ends oil sands partner search, but not for long

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For Cenovus Energy Inc., which has dropped its effort to find another oil sands joint venture partner, no means no – at least for 24 months.

The company said Wednesday it shut the data room it had opened to find a new partner for its Telephone Lake project, a transaction expected to yield $1-billion to $3-billion. The reason: Buyers, Cenovus said, are more interested in getting oil now, rather than buying in to a project starting years in the future.

In other words, they weren't going to pay for barrels they couldn't sell right away.

So Cenovus is going to go it "100 per cent through the regulatory process," chief executive Brian Ferguson said in an interview. There are companies that "would like me to reopen [the data room] but I'm not going to."

At least not until that regulatory review is done. That process is expected to conclude in 2014, at which point Cenovus will have an approved project that is presumably worth a lot more.

But don't think that Cenovus doesn't still want a partner. Mr. Ferguson, despite talking up the advantages of Cenovus going it alone on a project whose prospects improved after winter drilling work, made that much clear. In fact, you could be forgiven for hearing his description of Telephone Lake – "world class," a "cornerstone asset" – as a sales pitch.

"We did have several parties who have indicated to us that they would really like to get re-engaged if we choose to in the future," Mr. Ferguson said. "And that's one of the things that's always been important to me. You always do your best deals when you don't need to do a deal."

You could, again, be forgiven for questioning just how closed-down that data room really is.