PTTEP to Take $2.28B Stake in Statoil Canada Oil Sands Project
PTT E&P (PTTEP) disclosed that on November 22, 2010, PTTEP Netherland Holding Limited or PTTEP NL (a subsidiary of PTTEP) has signed the Partnership Unit Sale Agreement with Statoil Canada and Statoil Canada Holdings Corp. (the subsidiaries of Statoil) to acquire a 40% interest in the Kai Kos Dehseh Oil Sands Project (KKD) in Canada. The transaction will be completed through the purchase of 40% of the partnership units of Statoil Canada Partnership (SCP) for a total consideration of US $2.28 billion. Upon the closing of the transaction, Statoil will hold a 60% interest in SCP and retain the operatorship of KKD.
KKD is a significant oil sands deposit in Canada covering an area of 257,200 acres with an estimated 4.3 billion barrels of recoverable Bitumen resources (independently assessed by a leading external petroleum consultant). KKD is an IN-SITU oil sands project utilizing Steam Assisted Gravity Drainage (SAGD) technology, well established and proven production technique, with an expected project life of over 40 years.
KKD is located in Athabasca, Alberta in western Canada, and its attractive acreage position is surrounded by around 11 other commercial SAGD projects. KKD has 5 core areas, namely Leismer, Corner, Thornbury, Hangingstone, and South Leismer. In early 2011, the Leismer Project will have an initial production at 10,000 barrels per day (gross). Given the large bitumen resources, a staged development program is envisaged, which could ultimately bring production levels to over 300,000 barrels per day (gross) from the 5 areas.
The primary product of the KKD oil sands project will be sold to various refineries in the U.S.A. In the long run, additional potential markets for KKD's heavy oil product is expected to develop in the US Gulf Coast region, and potentially to the Canadian West Coast where heavy oil product could access Asian markets.
The acquisition of interest in KKD marks a transformational step in PTTEP's expansion plans and represents a strong fit with the Company's long term growth strategy. This acquisition provides the Company access to a highly attractive oil sands deposit in Canada and a strong platform for future growth into unconventional resources, including the opportunity to form a partnership with Statoil, one of the world's leading companies on heavy oil and deep water exploration and production.
This transaction is expected to be completed within the first quarter of 2011 and subject to typical conditions precedent, including Canadian regulatory approvals.
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