TORONTO, March 20 (Reuters) - Petro-Canada PCA.TO and partners in its Fort Hills oil sands venture said on Friday they reached an deal with the Alberta government on extending leases, one of the steps needed to move the delayed project ahead.
Fort Hills Energy LP said the Western Canadian province agreed to extend the term of the Fort Hills oil sands leases until 2019 in exchange for a commitment to upgrade the tar-like bitumen produced from the second phase of the project in Alberta.
In November, Petro-Canada delayed an investment decision on proceeding with the Fort Hills oil sands mine by a year, to late 2009. It also shelved plans to build an upgrader to process the bitumen into refinery-ready crude in an effort to cut the project’s price tag.
“The current economic climate has slowed us down,” Neil Camarta, Petro-Canada’s senior vice-president of Oil Sands, said in a statement.
“We are very pleased that the province of Alberta has agreed to a compromise that gives us the additional time to make this project a reality.”
Petro-Canada has a 60 percent stake in Fort Hills. Its partners, each with a 20 percent interest, are UTS Energy Corp UTS.TO and Teck Cominco TCKb.TO (Reporting by Jeffrey Hodgson; Editing by Jan Dahinten)