BP Amoco Exits Oil Production to Focus on Gas
In less than two months, BP Amoco Canada succeeded in unloadingall of its crude oil producing properties in Canada in an effort tolower costs and focus on natural gas, gas liquids andpetrochemicals. The company said last week it signed agreements tosell its heavy oil operations to Canadian Natural Resources andPenn West Petroleum for C$1.6 billion.
The assets include five major fields, which currently produce atotal of 54,300 b/d of oil and liquids and 75 MMcf/d of gas. About250 employees will be affected by the sale, but many are expectedto sign on with the two buyers, said Dan Kane, spokesman for BPAmoco Canada.
“We’re basically just pruning our assets to grow. It’s justbasically fine tuning what we have,” he said. “The heavy oil assetsjust didn’t fit in BP Amoco’s worldwide portfolio. They are goodproperties as you can see by the quickness of the sale. We justannounced we were selling them in June.” There will be a few moreniche sales, he added, but the company plans to remain “big ongas.”
“We’re the largest producer in Canada with more than 1 Bcf/d.But we’re also going to focus on liquids and petrochemicals. We’regoing to concentrate on lowering our costs so we can be aprofitable business.”
Canadian Natural is buying the Bonnyville thermal heavy oilassets, the Wabasca conventional heavy oil and the Nipisiconventional oil and gas assets for C$1.06 billion. Currentproduction from those assets is 42,000 barrels per day of oil andliquids and 18 MMcf/d of gas. Penn West will be acquiring theDrayton Valley conventional oil and gas field and the Hoosierconventional heavy oil and gas field for C$540 million the DraytonValley and Hoosier assets which are currently producing 12,300 b/dof oil and liquids and 57 MMcf/d of gas. The effective date of thesales is Aug. 1 and closing is expected to occur on Oct 1.
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