* Canada's new rules have changed the landscape for
* Part of effort to reduce exposure to higher cost projects
* Shares of Conoco rose 5 cents to $58.09
(Adds CEO commentary, share price, byline)
By Anna Driver
Feb 28 ConocoPhillips, which has been
looking to sell down its interest in Canada's oil sands said
that moves by Ottawa to limit foreign investment in that
country's resources have made it more difficult for some buyers,
the chief executive said Thursday.
In December, Canada put in place new rules limiting control
of its oil sands by foreign state-owned companies who would like
to own more than a minority stake in a project.
The changes followed the contentious takeovers of Canadian
energy producers Nexen Inc and Progress Energy
Resources Corp by Chinese and Malaysian state-owned
The complexity and size of Conoco's oil sands projects in
Western Canada have prompted the Houston-based oil major to take
its time finding the right partner, Conoco Chief Executive
Officer Ryan Lance told Reuters. But he added Canada's new rules
have changed the landscape for investment.
"I just think we need to be cognizant and aware of the
current lay of the land, the politics that are up there," Lance
"Certain kinds of buyers and certain kinds of deal
structures may have a more difficult time in Canada as a result
of the investment Canada decisions that came through the
Progress deal with Petronas and through the CNOOC deal with
Nexen," the executive said.
Last January, Conoco said it is seeking a buyer for 50
percent of a large portion of its Canadian oil sands holdings,
assets that could eventually produce more than half a million
barrels a day.
Conoco also has 50 percent interest in the Surmont, Foster
Creek and Christina Lake oil sands projects in Alberta.
"It's a mix of stuff we have and it appeals to buyers in
different ways, Lance said in an interview.
The planned oil sands stake sale is part of the company's
effort to reduce exposure to higher cost projects to free up
funds for shale development, Lance told analysts attending the
company's analyst meeting in New York.
Oil and gas companies including Conoco are spending billions
to increase crude oil output from lower-cost and stable basins
in North America and other parts of the world.
Houston-based Conoco has promised investors that its
production, margins, cash flow and dividend will grow over five
years, helped by higher output of crude from places like the
Eagle Ford formation in South Texas.
Conoco also said it is looking to sell some of its 37.5
percent 37.5 percent interest in the Australia Pacific LNG
project with Origin Energy and China's Sinopec
. Earlier this month, Origin raised APLNG's cost
estimate 7 percent to $25.4 billion.
Shares of Conoco rose 5 cents to $58.09 in afternoon New
York Stock Exchange trading.
(Reporting By Anna Driver; Editing by Gerald E. McCormick,
Marguerita Choy and Sofina Mirza-Reid)