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BP Amoco to Offer Canadian Oil Properties for Sale

Release date: 10 June 1999
Calgary (10 June 1999) -- BP Amoco today announced plans to sell its Canadian conventional and heavy oil properties in 1999. The properties being considered for sale represent approximately 60,000 barrels of oil equivalent (BOE)/day of production, or 30% of BP Amoco's total Canadian production.

"The sale results from a 1999 Strategic Review of our portfolios in Canada and worldwide to prioritize the demand for capital," said Joseph H Bryant, Regional President of BP Amoco in Canada. "Our goal is to be the lowest cost producer in Canada in our natural gas, natural gas liquids and chemicals operations. We will continue to focus on our core Canadian assets to maximize growth and profitability through appropriate ongoing investment."

The properties will be marketed in several packages, however consolidated offers on all the properties will be considered. Engineering and environmental assessments will begin immediately and information will be available to potential buyers over the summer. BP Amoco expects to receive bids and complete transactions throughout the third and fourth quarters of 1999.

"This premium suite of properties reflects the experience, skills and dedication of the employees working in our operations," said James Dupree, President of BP Amoco's Canadian Oil Business Unit. "In recent years, we've integrated advanced technology that has significantly reduced our cost structure and optimized our production. We believe our oil properties will be very attractive to companies interested in growing their business in Canada."

Approximately 250 employees will be affected in Calgary and in the field. BP Amoco will continue its practice of treating employees with dignity and respect during the transition. As in the past, where possible, the company will help employees secure new positions with BP Amoco, with the purchasers, or ease their transition into other employment.
BP Amoco is an international company involved in the exploration and production of crude oil and natural gas; refining, marketing, supply and transportation of hydrocarbons; and manufacturing and marketing of petrochemicals and solar power generation.
BP Amoco Canadian Oil Business Unit Statistics
  • Production: 60,000 barrels per day oil equivalent (BOE/D), net of royalty
    40,000 bpd of heavy oil
    13,000 bpd of light conventional oil
    40 mmcfd (million cubic feet/day) of gas in Drayton Valley & other property

  • Based on 60,000 BOE/D production, the assets for sale would be the 20th largest petroleum company in Canada (based on production volumes quoted in July 6, 1998 OilWeek -based on 1997 production). Companies with comparable volumes quoted in the OilWeek report:
    Chevron #17 87,000 bpd
    Poco #18 82,680
    Crestar #19 79,500
    NorthStar #20 42,100
    Can. Hunter #21 37,192
    Numac #22 34,600

  • Employees
    250 people in Canada Oil Business Unit
    75 people in Calgary office
    175 people in field operations

Major Operating Areas in Marketing Program (Volumes net of royalty)

  • Heavy Oil
    Bonnyville Thermal Steam Project: 30,000 bpd
    Wabasca primary recovery area: 8,000 bpd
    Hoosier, askatchewan: 2,400 bpd

  • Light Oil
    Drayton Valley Area & other property: 10,000 bpd
    Nipisi: 2,900 bpd

  • Natural Gas
    Drayton Valley Area : 40 mmcfd

Marketing Plan

  • Timing

    • BP Amoco will initiate engineering and technical studies in June 1999
    Properties will be marketed in summer 1999
    Close of sales is expected in fall and winter 1999

  • Packages

    • The properties will be marketed in several packages based on location and type of product, heavy oil, light oil or natural gas. However consolidated offers on all the properties will be considered.

    Engineering and environmental assessments will begin immediately and information will be available to potential buyers over the summer. BP Amoco expects to receive bids and complete transactions throughout the third and fourth quarters of 1999.

  • BP Amoco will market the properties.

    • We will conduct a competitive bid process on the properties.

Market Receptivity is expected to be favorable

  • The BP Amoco Canadian oil properties are large scale and high quality.

  • The current portfolio are the high graded properties remaining after 10 years of rationalization and divestment from 1988 to 1998.

  • Distinctive Assets

    • Bonnyville

    100% working interest in 30,000 bpd
    significant growth potential
    55,000 bpd oil processing and steam generation facility

    Wabasca

    Operator in a very active heavy oil area
    BP Amoco has large undeveloped resource

    Drayton Valley

    Pembina oil field is largest oil field in Canada
    6 billion barrels original oil in Place
    BP Amoco holds the lead position in the field
    Remaining production life of 30 to 50 years
    Reserve / production ratio of 12-16 years

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