February 1, 2013 / 4:30 AM / 5 years ago

Barrick starts process to sell energy unit

TORONTO, Jan 31 (Reuters) - Barrick Gold Corp has started a process to sell its oil and gas unit, Barrick Energy, as it seeks to offload non-core assets, a company spokesman said on Thursday.

Barrick, the world’s top gold miner, is selling the unit in an auction process, a spokesman said.

“Barrick is currently evaluating opportunities to optimize the company’s global portfolio as part of a disciplined capital allocation framework introduced in 2012,” said spokesman Andy Lloyd in an email.

“Opportunities to divest non-core assets, including Barrick Energy, are under consideration as part of this process.”

Lloyd would not say how much Barrick expected to raise in the auction or whether there had already been expressions of interest.

Barrick acquired the oil and gas assets, in Canada’s energy producing province of Alberta, in 2008 in an effort to hedge against rising energy costs. Barrick Energy produces some 9,000 barrels of oil equivalent a day.

The company is selling the unit as the spread has grown between Alberta oil prices and the Texas crude price.

Barrick Energy’s sales are at Edmonton Par price, while the miner’s energy costs are benchmarked against the WTI price.

The gold producer has struggled in recent quarters with escalating capital costs and delays at its massive Pascua-Lama gold project on the border between Chile and Argentina.

Earlier this month, talks to sell its African Barrick subsidiary to China National Gold Group Corp fell apart after the miners failed to agree on price.

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