Cenovus CEO sees new oil sands partner by year-end
* "World class" holdings include Telephone Lake
* Not limiting potential deal structures
* ConocoPhillips split seen having little impact
By Jeffrey Jones
CALGARY, Alberta, July 26 (Reuters) - Cenovus Energy Inc (CVE.TO) expects to announce a joint venture by the end of the year to develop Alberta oil sands holdings that are not currently part of a 10-year growth plan, its chief executive said on Tuesday.
Cenovus has hired RBC Capital Markets and Barclays Capital to assist in its search for a partner to take a stake in a portion of the company's early-stage Borealis holdings. That would include a wholly-owned prospect called Telephone Lake.
"This, I would characterize, will be a world-class opportunity that we're taking to market here in terms of the size and the scale of it, but I don't want to get into specifics at this point," Chief Executive Brian Ferguson told analysts.
Cenovus is seeking to revise its application with regulators for Telephone Lake to 90,000 barrels a day from 35,000.
A joint venture would be in addition to the company's alliances with ConocoPhillips (COP.N). The two currently operate the producing Foster Creek and Christina Lake, Alberta, steam-driven oil sands projects and plan to develop a new 130,000 bpd project called Narrows Lake.
They also have 50-50 stakes in refineries in Wood River, Illinois, and Borger, Texas.
Expansion of the oil sands projects is key to a plan by Cenovus to lift its production to half a million barrels a day in a decade, up from an expected 150,000 by year-end 2011.
The Borealis holdings do not currently figure in that plan.
In an interview, Ferguson said the company is looking for joint venture partners that bring something other than cash to the table, including proposals that would help Cenovus become less exposed to the vagaries of the price spread between light and heavy oil.
"We would be looking, first and foremost, with someone who is strategically aligned with us and we're quite open-minded about he nature of a transaction," he said. "We'll consider any of a joint venture, farm-out, divestiture or other former of partnering. We really don't want to, in any way, limit the public competitive process that we are pursuing."
During the conference call, Ferguson said ConocoPhillips' recent decision to split its refining operations from its exploration and production arm would have minimal impact on its partnerships. (Reporting by Jeffrey Jones; editing by Rob Wilson)
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