By Shariq Khan
Sep 7 – Repsol has agreed to sell about 38,000 acres of oil and gas-producing land in Alberta to Teine Energy, backed by the Canada Pension Plan Investment Board, three sources familiar with the matter told Reuters on Tuesday.
The Spanish oil company will receive up to 400 million Canadian dollars ($304.65 million) from the sale, one of the sources said.
Repsol and Teine have applied for regulatory approval for the deal and expect to receive it by the end of September, the sources said. They warned there is no assurance Alberta’s regulators will allow the proposed transaction and that the deal could fail.
The Canada Pension Plan Investment Board (CPPIBfor its acronym in English) declined to comment, while Repsol and Teine Energy did not respond to requests for comment.
The potential sale includes Repsol’s heavy oil and gas production assets and the intermediate infrastructure it supports, such as a network of some 1,800 kilometers of pipelines, the sources said. They requested anonymity to discuss the confidential negotiations.
Reuters reported in February that Repsol is considering selling some of its Canadian assets, aiming to take advantage of an oil and gas bonanza.
The sale would also allow Repsol to redirect money and efforts to more productive shale regions, such as the Eagle Ford shale field in the United States, or boost investment in renewable energy, the sources said.
Energy prices have fallen in recent weeks, but remain high. The global benchmark Brent oil is up more than 20% so far this year, trading around $93 a barrel on Tuesday.
This surge has prompted major oil companies to sell assets in Canada, the fourth-largest oil-producing country.
Exxon Mobil Corp and its Canadian unit Imperial Oil Ltd sold their joint venture in June. XTO Energy Canada to Whitecap Resources Inc for 1.9 billion Canadian dollars (1.5 billion dollars), while the Japanese JAPEX last year it sold its stake in the Hangingstone oil sands project.
Repsol’s website lists Chauvin as one of its heavy oil fundamental assets, although the last time the company conducted new drilling in the field was at least four years ago, according to the sources. Repsol’s production in this area is about 6,800 barrels of oil equivalent per day, according to the sources.
Following the sale of Chauvin’s assets, Repsol will continue to own land in other gas-producing fields in Canada and electrical infrastructure, among other things.
($1 = 1,3135 Canadian dollars)
