Statoil signs agreement to sell KKD oil sands projects to Athabasca Oil

Norwegian oil major Statoil has signed an agreement with Athabasca Oil Corporation to divest its wholly owned Kai Kos Dehseh (KKD) oil sands projects in Alberta, Canada.

The agreement includes the Leismer demonstration plant and the undeveloped Corner project, with multiple midstream contracts associated with Leismer’s production.

After the completion of this transaction, Athabasca will operate the Leismer plant and Corner project, and Statoil will cease all its operatorship in these oil sands assets.

Statoil will receive C$832m ($625.61) as consideration for this transaction. Under the agreement, Athabasca will receive C$435m ($327.09) in cash and C$147m ($110.53) in the form of 100 million common shares.

Additionally, around C250m ($187.98) will be paid through a series of contingent payments.

Statoil executive vice-president for development and production international Lars Christian Bacher said: “This transaction corresponds with Statoil’s strategy of portfolio optimisation to enhance financial flexibility and focus capital on core activities globally, including offshore Newfoundland, Canada.

“The Statoil organisation has since 2007 continuously improved operational performance, kept a good safety record and delivered strong production from Leismer. We consider Athabasca a prudent operator and very well placed to take these assets forward.”

Statoil gained operatorship of KKD after it acquired North American Oil Sands Corporation in 2007.

In 2011, PTTEP bought 40% interest of KKD and three years later PTTEP and Statoil divided their respective interests in it.

The transaction is scheduled to become effective from 1 January next year, subject to customary closing conditions and regulatory approvals.

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Image: The Leismer facility in Alberta, Canada. Photo: Courtesy of Lawrence Sauter / Statoil.