Petro-Canada On Track with Veba Acquisition

Petro-Canada completed the acquisition of most of the international oil and gas operations of Veba Oil & Gas, announced on January 29, 2002. Rights of first refusal were exercised with respect to non-core assets in Norway and Egypt. Rights of first refusal remain outstanding with respect to assets in Venezuela, with resolution expected towards the end of the year.

Petro-Canada now assumes control of the operations, which will be run under the Petro-Canada name from a corporate office in Essen, Germany, and an operations centre in London. With today's completion, Petro-Canada will move quickly to integrate the former Veba Oil & Gas employees and operations into the Company's business.

The International business is focused on three prolific exploration and production regions: the North Sea, North Africa and Northern Latin America. The acquisition establishes International as a fifth core business for Petro-Canada, which is already a leader in Canadian East Coast offshore oil, North American natural gas, the Alberta oil sands and Canadian refining and marketing.

"Petro-Canada has seized an excellent opportunity to expand internationally, and we're pleased to complete the primary transaction in the expected timeframe," said Norm McIntyre, President of Petro-Canada, who will lead the new International business from London. "We've gained strong current production, a first-rate organization, and opportunities for both near-term development and longer-term exploration. International will be an important platform for growth for Petro-Canada."

The assets acquired today accounted for 198,000 barrels per day of oil equivalent production in the first quarter of 2002 on a "net interest before royalties" basis, consistent with Petro-Canada's reporting practices. Production beginning today, and the associated financial results, will be consolidated with Petro-Canada's results for the second quarter.

Financing for the transaction was done using a portion of Petro-Canada's cash balance and a draw-down of Cdn. $2.1 billion from interim credit facilities established for the transaction.