Petro-Canada taking stake in UTS Energy's oil sands project

By OGJ editors

HOUSTON, Mar. 7 -- Petro-Canada has agreed to obtain from UTS Energy Corp. a 60% stake in the Fort Hill oil sands in northeastern Alberta in exchange for an initial $300 million (Can.) payment and 60% funding of future development costs. Both companies are based in Calgary.

With Petro-Canada assuming operatorship, the partners have yet to finalize a development plan that is expected to involve phases to expand bitumen production up to 100,000 b/d.

Petro-Canada Vice-Pres. Brant Sangster told reporters during a Mar. 1 news conference that proposed mining and upgrading facilities could cost $5 billion total.

The company will seek regulatory approval for a new upgrader north of Fort McMurray, Alta., and the Alberta Energy and Utilities Board has already approved a Fort Hills mining project of 50,000 b/d of bitumen production. Mining is expected to start in 2009, and the new upgrader could become operational in 2010-11, Sangster said.