Worker on an Athabasca Oil rig
Now that the federal government has provided some clarity on foreign takeovers, Athabasca Oil Corp. thinks a joint venture to develop its oil sands assets is within reach.
Earlier this year Athabasca looked to ink a multibillion-dollar joint venture with partners from Kuwait and Spain. However, uncertainty stemming from CNOOC Ltd.'s $15.1-billion bid for Nexen Inc. scared potential partners Kuwait Petroleum Corp. and Repsol YPF SA away, leaving investors wondering if they would ever come back.
On a conference call to discuss Athabasca's 2013 capital spending budget, chief executive officer Sveinung Svarte said he is still optimistic about the joint venture, but can't nail down any firm dates – at least not publicly.
"We are still giving more time to have that one landed," he said. "Timing is very difficult to predict."
Mr. Svarte also acknowledged that Athabasca will eventually need another joint venture to develop its Duvernay assets." We will have to take partners in the future," he said. "It's just too much cost."
The timing for any deal in this region is much less pressing. "We think it's too early to take partners there," Mr. Svarte said. Instead, the company will go forward with its own capital spending in 2013 – aided by a recent high yield debt offering – and will then reassess its development plans six to nine months into the year.
But Mr. Svarte certainly hinted that something is coming, noting more than once that he was "interested" by Encana's recent $2.2-billion joint venture with PetroChina.
However, he won't need a joint venture or any help to develop his light oil assets because all the "heavy lifting is done," he said.
Athabasca is currently producing 10,000 barrels of oil equivalent a day and will exit the year with production of about 10,000 to 11,000 barrels. By June 2013, that will climb to between 11,000 and 13,000 barrels of oil equivalent a day.
Mr. Svarte also proudly pointed out that Athabasca raised the third most money for Movember in Canada, and was the fourth largest fund raiser globally. A true accomplishment.
Tim Kiladze