* "World class" holdings include Telephone Lake
* Not limiting potential deal structures
* ConocoPhillips split seen having little impact
By Jeffrey Jones
CALGARY, Alberta, July 26 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
Cenovus is seeking to revise its application with
regulators for Telephone Lake to 90,000 barrels a day from
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
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
(Reporting by Jeffrey Jones; editing by Rob Wilson)