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Canadian BP Amoco Sheds Oil to Focus on Gas

Canadian BP Amoco Sheds Oil to Focus on Gas

BP Amoco is shedding its oil interests in Canada to concentrate on natural gas, with a vow to be the lowest-cost leader in a Canadian producer community tooling up to expand exports to the United States. The newly-merged empire's Canadian arm has put up for sale assets currently producing 53,300 barrels per day or nearly all of the former Amoco Canada's oil holdings. The only gas put on the block is about 40 MMcf/d, or 4% of BP Amoco's Canadian daily production of about 1 Bcf which is associated with oil properties.

Although the oil assets are being sold in regional packages, BP Amoco said it will consider single bids for the entire suite. Any organization that bought the whole offering would instantly rank as Canada's 20th-largest oil company.

BP Amoco's regional president for Canada, Joseph Bryant, vowed "our goal is to be the lowest-cost producer in Canada in our natural gas, natural gas liquids and chemicals operations. We will continue to focus on our core Canadian assets to maximize growth and profitability." The BP Amoco action expressed in a nutshell a trend throughout the Canadian industry, which is switching to gas as fast as it can in anticipation of the 2000 completion of Alliance Pipeline on top of expansions by the TransCanada and Foothills-Northern Border export routes. In the first five months of this year, Canadian producers managed to complete 2,276 new gas wells despite the squeeze on revenues and budgets brought on by poor oil prices for most of the period. In the same period a year ago, Canadian producers completed 2,091 gas wells.

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