CALGARY - Kuwait's state-owned petroleum company has reportedly signed a preliminary deal to invest as much as $4-billion in a joint venture with Athabasca Oil Corp.
The Globe and Mail says officials of Kuwait Petroleum Corp. have a memorandum of understanding for an investment to develop some of Athabasca's (TSX:ATH) oilsands properties in northern Alberta.
The newspaper quotes Kuwait's Ambassador to Canada, Ali al-Sammak, as confirming the deal, which the he says should be finalized by October.
Athabasca's stock has been halted on the Toronto Stock Exchange pending news.
Athabasca publicly stated last month that it was looking for a partner to help develop its properties.
"The company has undertaken joint-venture initiatives during the first six months of 2012 and we are confident that an oilsands joint venture agreement may be concluded during the third quarter,'' CEO Sveinung Svarte said on a July 26 conference call to discuss the company's second-quarter results.
Athabasca is no stranger to joint ventures. In 2009, Athabasca sold a 60 per cent interest in its MacKay River and Dover oilsands lands to PetroChina.
Earlier this year, Athabasca exercised its option to sell the rest of MacKay River to PetroChina, making it the first oilsands operation to be fully controlled by a Chinese company.
Another Chinese state-owned outfit, China National Offshore Oil Company, has reached a deal to buy Nexen Inc. (TSX:NXY) for $15.1 billion, which would give it full control of the Long Lake oilsands project in northern Alberta. Industry Minister Christian Paradis is weighing whether the deal is of net benefit to Canada.
The Dover project is expected to obtain regulatory approval early next year and once it does there will be an identical divestiture option.
"You don't do JVs because you think they're fun. You do JVs because you need the financing,'' said Svarte.
"These are items that take time, but it's important to get them right up front because they can be very large value drivers, especially some of these partners we look at are people who can bring markets and help us also to commit to pipelines in the future.''
