BP Amoco to Offer Canadian Oil Properties for Sale
"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.
- 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
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
- BP Amoco will market the properties.
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
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.
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
100% working interest in 30,000 bpd
significant growth potential
55,000 bpd oil processing and steam generation facility
WabascaOperator in a very active heavy oil area
BP Amoco has large undeveloped resource
Drayton ValleyPembina 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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