Athabasca Oil Corp. (TSX:ATH) confirmed Friday that it is in the preliminary stages of establishing a joint venture for two of its Alberta oil sands assets, but it declined to identify its partner.
“Athabasca confirms that it has signed a letter of intent that contemplates a joint venture involving Athabasca’s Hangingstone and Birch properties,” the company said in an e-mailed release, not published on the company's website yet.
The news follows a report in the Globe and Mail Friday, stating that Kuwait’s state-owned petroleum company is looking to invest as much as $4 billion in an oil sands partnership.
Kuwait’s Ambassador to Canada, Ali al-Sammak, was quoted as saying the deal should be finalized by October.
He added that Kuwait Petroleum "is seeking to diversify its operations beyond the Middle East and to improve its access to oil sand extraction technology, which could be used in its own heavy oil fields."
But the Canadian company cautioned that “no assurance can be given that the transaction contemplated by the letter of intent will be completed.”
In July, China's third-largest state owned oil company – China National Offshore Oil Corp or CNOOC – announced a $15.1 billion takeover of Canadian oil sands player Nexen (TSX & NYSE:NXY), the biggest ever foreign investment in the North American country.
Last week, CNOOC said it would take radical actions to raise the needed funds to afford Nexen. If successful, the deal will pave the way for China to gain new technology and operational experience that would help it extract its domestic oil.
The country hasn’t extracted much of the commodity at home, but experts say it will eventually have to in order to support its expanding economy and keep expensive imports in check.
To date Chinese owned companies have invested over $15 billion in Albertan oil sands developments and roughly 70% of all oil sands production is owned by out of Canada shareholders.
Flickr creative commons photo by Eurofruit, Asiafruit & Americafruit