BP pushing ahead with Canada oil sands project -
BP is pushing ahead with plans to expand its interests in Canada's
vast oil sands deposits
By Roland Gribben
Published: 8:05PM GMT 14 Feb 2010
An open cast mine near Fort McMurray, Alberta, Canada,
which is being used to extract oil from the Athabasca tar
sands fields Photo: PA
The oil giant is already under fire over its involvement in a $10bn (£6.4bn) project in Alberta but discussions now under way could provide the basis for a more ambitious programme to increase investment in the world's biggest oil sands territory.
BP is understood to be negotiating a $1.2bn deal to buy a majority stake in Value Creation, an over-stretched Canadian company struggling to reach an agreement with creditors before a deadline set for today (Monday).
Value has considerable attractions because it has one of the biggest holdings of oil sands leases covering around 430 square miles holdings but is saddled with debt.
BP refuses to comment on the deal speculation but Columba Yeung, the founder and chairman, has dropped heavy hints that BP is in the frame to complete an asset deal – although Reliance Industries, the Indian conglomerate, is said to have made a $2bn offer for the company. Mr Yeung founded the company in 1999 and has played a key role in developing technology to turn the heavy bitumen based sands into oil products.
Oil sands developments have attracted considerable controversy because surface mining makes them environmentally sensitive and costly. But with higher oil prices improving production economics and oil sands representing one of the industry's last frontiers Alberta is on course to be one of the world's top four oil producers by 2020.
BP is in partnership with Canada's Husky Energy for the $10bn Athabasca oil sands development with a project designed to produce 200,000 barrels a day, although is yet to receive the go-ahead.
Opponents of BP's expansion in Canada plan to voice their protests at the group's annual meeting in April. Co-operative Asset Management, the UNISON staff pension scheme, Rathbone Greenbank clients and the COIF Charities Investment Fund, operating under the umbrella of FairPensions, the investor group, have tabled a motion questioning whether the investment will be profitable and voicing concern about the impact on the environment and local communities.
BP has been canvassing support among investors and pointing out that its technology which involves liquefying the bitumen underground is less damaging.
Shell has bowed to protests to slow development in Canadian oil sands but Tony Hayward, BP's chief executive, believes the way BP will handle its projects will meet environmental objections and satisfy investors.
BP is pushing ahead with plans to expand its interests in Canada's
vast oil sands deposits
By Roland Gribben
Published: 8:05PM GMT 14 Feb 2010
An open cast mine near Fort McMurray, Alberta, Canada,
which is being used to extract oil from the Athabasca tar
sands fields Photo: PA
The oil giant is already under fire over its involvement in a $10bn (£6.4bn) project in Alberta but discussions now under way could provide the basis for a more ambitious programme to increase investment in the world's biggest oil sands territory.
BP is understood to be negotiating a $1.2bn deal to buy a majority stake in Value Creation, an over-stretched Canadian company struggling to reach an agreement with creditors before a deadline set for today (Monday).
Value has considerable attractions because it has one of the biggest holdings of oil sands leases covering around 430 square miles holdings but is saddled with debt.
BP refuses to comment on the deal speculation but Columba Yeung, the founder and chairman, has dropped heavy hints that BP is in the frame to complete an asset deal – although Reliance Industries, the Indian conglomerate, is said to have made a $2bn offer for the company. Mr Yeung founded the company in 1999 and has played a key role in developing technology to turn the heavy bitumen based sands into oil products.
Oil sands developments have attracted considerable controversy because surface mining makes them environmentally sensitive and costly. But with higher oil prices improving production economics and oil sands representing one of the industry's last frontiers Alberta is on course to be one of the world's top four oil producers by 2020.
BP is in partnership with Canada's Husky Energy for the $10bn Athabasca oil sands development with a project designed to produce 200,000 barrels a day, although is yet to receive the go-ahead.
Opponents of BP's expansion in Canada plan to voice their protests at the group's annual meeting in April. Co-operative Asset Management, the UNISON staff pension scheme, Rathbone Greenbank clients and the COIF Charities Investment Fund, operating under the umbrella of FairPensions, the investor group, have tabled a motion questioning whether the investment will be profitable and voicing concern about the impact on the environment and local communities.
BP has been canvassing support among investors and pointing out that its technology which involves liquefying the bitumen underground is less damaging.
Shell has bowed to protests to slow development in Canadian oil sands but Tony Hayward, BP's chief executive, believes the way BP will handle its projects will meet environmental objections and satisfy investors.
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