Oil Sands NewsCanadian Natural may seek partner for project
00:00 EDT Thursday, August 08, 2002
CALGARY -- Canadian Natural Resources Ltd. said yesterday that it may enlist a partner for its proposed oil sands megaproject, allowing it to save billions and guaranteeing an outlet for its synthetic crude production.
Canadian Natural is still seeking regulatory approval for its Horizon oil sands project, about 80 kilometres north of Fort McMurray, Alta., but analysts believe it will receive the green light.
Any decision on whether to bring in a partner will be made before the scheduled start of construction in January, 2004, Canadian Natural said yesterday in a conference call discussing its second-quarter results, which met expectations.
John Langille, Canadian Natural's president, said his firm would keep a majority stake in the project in any case. He would not say who might be a prospective partner, but did say that a company with downstream operations or refining capacity would be particularly attractive.
Canadian Natural is projecting that the first phase of the project will cost $4.9-billion -- comparable with the expense of Suncor Energy Inc.'s Millennium operation. But Mr. Langille said his firm will likely undershoot that target. "We do anticipate we'll be able to bring it in cheaper."
A major American oil firm or an international operation could quite likely team up with Canadian Natural in order to obtain a secure and long-term source of oil, said Brian Prokop, an analyst at Peters & Co. Ltd. in Calgary.
He said U.S. oil concerns will increasingly turn their attention to the Alberta oil sands -- building on their acquisitions of natural gas assets in this country -- as they realize the value of a resource that has no exploration costs and is in a politically stable region. "Oil sands will be the next step in Americans coming up," he said.
For the second quarter ended June 30, Canadian Natural reported a profit of $145-million or $1.18 a share on revenue of $863-million. Analysts had predicted earnings of $1.20 a share, according to Thomson Financial/First Call.
A year ago, the company reported a profit of $286-million or $2.37 a share on revenue of $981-million.
Canadian Natural fell $1.10 to $51.22 on the Toronto Stock Exchange yesterday.
But it is still sitting near its 52-week high of $54.54
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Good luck to all