Athabasca Oil waits as joint-venture partner seeks approval

Tue Dec 11, 2012 5:22pm EST

* Joint venture deal awaiting clearance

* New Canadian rules no bar to deal

TORONTO Dec 11 (Reuters) - Athabasca Oil Corp said on Tuesday it is still looking to complete a joint venture deal on some of its northern Alberta oil sands properties despite new Canadian rules, as its as-yet-unnamed partner is seeking its own approvals for the transaction.

Athabasca is looking for a partner to help develop its Hangingstone and Birch oil sands properties. It said in September that it had signed a letter of intent with a potential investor, reported to be Kuwait's state-owned oil company, Kuwait Petroleum Corp.

Now Athabasca is waiting for that partner to get the go ahead from its own authorities.

"There's external parties that they need to deal with, government agencies, and we're waiting for them to go through their process on their end," Rick Koshman, Athabasca's vice president of projects and thermal operations, told Reuters following a presentation to an investment conference. "We still feel them to be a potentially very good partner for us ... These are big and complex deals, especially when you're involving other governments involved with the process."

Koshman said new rules introduced in Canada last week preventing state-owned oil companies from taking control of oil sands projects are unlikely to derail Athabasca's talks, since foreign buyers are still allowed to buy minority stakes in projects.

"We are not looking for a change of control. We are looking for joint ventures to 50 percent or less," he said.

Athabasca's Hangingstone property is its most advanced oil sands holding, with first production expected by the end of 2014. Construction is scheduled to start at the end of 2012.

The company has said it has the potential to eventually produce 80,000 barrels a day using steam-assisted gravity drainage, where steam is injected into the ground to loosen the tar-like crude so it can be pumped to the surface.

Birch could eventually support 155,000 barrels a day, though the company has said it plans to submit a regulatory application for a 12,000 barrel a day project later this year.

Athabasca shares fell 10 Canadian cents to C$9.90 on the Toronto Stock Exchange on Tuesday.

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