Several Major Oil Sands Cos Affected By Alberta Conservation Plan
April 05 2011 - 8:28PM
Dow Jones News
The Alberta government named several major Canadian and
international energy companies that have leases that may be
affected by a new conservation plan unveiled Tuesday prohibiting
oil sands development in some areas.
The list includes Imperial Oil Ltd. (IMO), which is majority
owned by Exxon Mobil Corp. (XOM), Norway's Statoil Ltd. (STO),
Canadian Natural Resources Ltd. (CNQ) and Cenovus Energy Inc.
(CVE).
The Alberta government said it plans to set aside more than
7,700 square miles of land in the northeastern oil sands region for
conservation that would preclude oil sands development on part of
10 leases held by energy companies.
The government said oil sands companies would be compensated for
their costs in purchasing and developing the canceled leases.
Cenovus Energy confirmed Tuesday that part of its Borealis oil
sands lease may be affected by the government's conservation plan,
but not the part that is currently planned for development.
Cenovus has applied to develop a 35,000 barrel-a-day oil sands
plant in the Borealis area, but spokeswoman Rhona DelFrari said the
project doesn't appear to be affected by the government's
conservation plan.
"We have a lot of land in northern Alberta, so it's looking like
the section that may be impacted by this is not the area that we
are planning to develop in the near future," DelFrari said. She
said it's not yet clear how much of Cenovus's booked oil sands
reserves would be affected by the government's decision. Because
Cenovus hasn't surveyed the resource on all of its oil sands
property, company reserves may not be affected at all.
A Statoil spokesman said the company is studying the plan and
didn't have an immediate comment.
Representatives of Imperial Oil and Canadian Natural Resources
weren't immediately available to comment.
Other companies that could be affected include fledging oil
sands producers Athabasca Oil Sands Corp. (ATH.T), Alberta Oilsands
Inc. (AOS.V), Southern Pacific Resource Corp. (STP.T), Perpetual
Energy Inc. (PMT.T) and Sunshine Oilsands Ltd.
David Pryce, a vice president for the Canadian Association of
Petroleum Producers, an industry group, said more compensation
should be available for companies that would see their leases
canceled.
"Companies have booked value for reserves that are there, and
that has been reflected in their share prices," he said.
-By Edward Welsch, Dow Jones Newswires; 403-229-9095;
edward.welsch@dowjones.com