Statoil gets the OK for oilsands bid
Norwegian firm to acquire NAOSC
Ashok Dutta
Calgary Herald
Wednesday, June 27, 2007
Norway's Statoil announced Tuesday it had crossed the final hurdle to enter Alberta's oilsands sector, with the receipt of final approval under the Investment Canada Act of the federal Department of Industry to acquire Calgary-based North American Oil Sands Corp.
In late April, Statoil had tabled a $2.2-billion offer to buy out NAOSC.
"It is an all-cash transaction and money is being transferred today," Statoil public affairs manager Kai Nielsen said Tuesday, while giving out details for the road map forward.
Under the deal, Statoil gains access to 1,110 square kilometres of oilsands leases in Athabasca with huge recoverable resources. First bitumen production is targeted in late 2009 from the 10,000-barrel-per-day Leismer demonstration project. At its full-blown size, the integrated project will have a capacity to produce 200,000 bpd of synthetic crude through the construction of an upgrader at Fort Saskatchewan.
"Site preparation has already started at Leismer," Nielsen said.
"In 2011, we will initiate engineering works for the main production units. This will include facilities for drilling and steam injection. The aim will be to reach a production capacity of 100,000 bpd by 2015."
The Norwegian firm will use the steam-assisted gravity drainage technology to extract the bitumen, rather than an open mine process.
Although a final decision has not been made on the licensor technology for the proposed upgrader, Nielsen said the facility will be built in two phases.
"Each will be of capacity 100,000 bpd and we will complete the process by late 2020," he said. "At this moment, options are being reserved for the sale of bitumen or heavy oil in the spot market."
Pauline Dingwall, North America and Alaska analyst with Edinburgh-based Wood Mackenzie, said the Statoil-NAOSC deal is part of ongoing efforts by large international oil companies to buy into Alberta's oilsands sector.
"The high cost of development is amply reflected in these deals and is a prime driver for acquisitions," she said.
Statoil Canada Ltd., a holding company of Statoil, will own shares and operate the oilsands project.
"At least until early 2008, it will continue to be called North American Oil Sands Corp. After our merger with Norsk Hydro, there may be a change in the name," Nielsen said.
On Oct.1, fellow Norwegian companies Statoil and Norsk Hydro are due to merge under a new name, StatoilHydro.
Shares of Statoil on the New York Stock Exchange closed at $29.03 on Tuesday, down $1.33.
adutta@theherald.canwest.com
© The Calgary Herald 2007
