(MENAFN- Arab Times) Kuwait Petro-leum Corporation (KPC) said late on Friday it had not signed a deal in Canada after reports it had completed a preliminary agreement with Athabasca Oil Corp to develop the Alberta oil sands.
"No agreement has been signed. Projects or any investment (are) subject to approvals of KPC board and the Supreme Petroleum Council, and this has not taken place so far," it said in a statement in English to Kuwait News Agency.
Athabasca said on Friday it had signed a letter of intent to jointly develop the Hangingstone and Birch oil sands properties without naming its partner, which a source familiar with the talks identified as the state-owned KPC.
The company said the deal is conditional upon finalising details and garnering regulatory approvals, and gave no assurance that it will be completed.
Athabasca spokeswoman Heather Douglas said on Friday she could not confirm or deny the identity of the would-be joint-venture partner.
Production
Athabasca's Hangingstone property is its most advanced oil sands holding, with first production expected by the end of 2014. Construction is scheduled to start at the end of 2012.
The company has said it has the potential to eventually produce 80,000 barrels a day using steam-assisted gravity drainage, where steam is injected into the ground to loosen the tar-like crude so it can be pumped to the surface.
Birch could eventually support 155,000 barrels a day, though the company has said it plans to submit a regulatory application for a 12,000 barrel a day project later this year.
Athabasca confirmed it had signed a letter of intent to jointly develop the company's Hangingstone and Birch oil sands properties, but did not name its partner in a news release requested by securities regulators.
The company said the deal is conditional upon finalizing details and garnering regulatory approvals, and gave no assurance that it will be completed.
A source familiar with the discussions, who declined to be named, said the prospective partner is Kuwait Petroleum Corp.
The Globe and Mail newspaper reported Kuwait's ambassador to Canada, Ali al-Sammak, had confirmed that officials signed a memorandum of understanding this month and that a final agreement between Athabasca and Kuwait Petroleum is expected in October.
The ambassador was not immediately available to comment to Reuters.
The newspaper said Kuwait Petroleum could invest up to $4 billion in the assets, though a source suggested that figure for developing the two steam-driven oil sands projects was "much too high".
Athabasca shares jumped C$1.07, or 9 percent, to C$13.58 on the Toronto Stock Exchange after they resumed trade following being halted on Friday.
The agreement comes as Ottawa grapples with how to deal with a rush by foreign state-owned enterprises to take positions in the tar sands, the world's third-largest crude deposit.
The Canadian government this week began reviewing a $15.1 billion takeover bid for Nexen Inc, which has oil sands holdings, by China's CNOOC Ltd to determine if the deal would be of net benefit to the country.
In recent years, Canada's energy sector has been the target of billions of dollars in new investments from such countries as Japan, South Korea, Thailand, Malaysia and Abu Dhabi.
Athabasca's Hangingstone property is its most advanced oil sands holding, with first production expected by the end of 2014. Construction is scheduled to start at the end of 2012.
The company has said it has the potential to eventually produce 80,000 barrels a day using steam-assisted gravity drainage, where stream is injected into the ground to loosen the tar-like crude so it can be pumped to the surface.
Birch could eventually support 155,000 barrels a day, though the company has said it plans to submit a regulatory application for a 12,000 barrel a day project later this year.
Athabasca Chief Executive Sveinung Svarte was not available for comment on Friday, Douglas said.
During Athabasca's second-quarter conference call on July 26, Svarte said he was confident the company would conclude an oil sands joint venture during the third quarter, though he did not name the prospective partner.
In January, Athabasca sold its interest in a project in the MacKay River region of northern Alberta to its partner PetroChina, giving China its first wholly owned Canadian tar sands development
Svarte said in July he saw no reason why values for joint ventures in the oil sands would have fallen from the time of the PetroChina deal.
"If you have the right-sized assets, the right quality, and an execution plan with a team that's willing to work with partners, you do find partners in oil sands, still. And we have a seen strong interest out there," he said.
Kuwait Petroleum has plans to boost production in international locations to 100,000 barrels a day and capacity to 200,000 barrels a day by 2010, according to its website.
A founding member of the Organization of the Petroleum Exporting Countries, Kuwait produces nearly 2.7 million barrels of oil a day, according to OPEC figures, about 300,000 barrels a day fewer than Canada.
Also:
KUWAIT CITY: Price of Kuwaiti crude oil went up 40 cents to $110.70 per barrel (pb) on Friday compared to $110.30 the day before, said Kuwait Petroleum Corporation (KPC) on Saturday.
The crude hike comes after US Federal Reserve Chairman Ben Bernanke's statement on the Fed's readiness to support the economy due to fears over production levels of the North Sea oil that could weigh on the US dollar.
Brent crude August price hit the nine percent mark, as well as the US light crude price for the same month, with a 9.55 increase.
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