News wire — Japanese state-backed oil producer Japan Petroleum Exploration Co (Japex) is considering a sale among other options for its Hangingston oil sands project in Canada, a company spokesperson said on Friday.
Japex is seeking a buyer for its 75% stake in the Hangingstone oil sands facility in Canada, two sources with direct knowledge of the matter previously told Reuters.
Several global oil majors have rushed to sell Canadian oil sands assets over the past four years over concerns ranging from high production costs and emissions to scarcity of capital.
Japex unit Japan Canada Oil Sands Ltd (JACOS) is majority owner of Hangingstone, with Chinese state-owned oil giant CNOOC holding the remaining 25%.
One source said JACOS could fetch more than C$200 million ($160 million) from the sale, which could attract notable bids as it has abundant oil reserves that would benefit from fresh funding.
“We are considering various measures including the sale of our stake and cutting production costs to improve profitability of the project, but nothing has been decided,” Yuki Goto, a spokesperson at Japex, told Reuters by phone, adding the move is part of its portfolio review.
JACOS, which did not respond to Reuters requests for comment, is working with an advisor on the sale, the sources said, requesting anonymity while discussing confidential talks.
They cautioned that a final decision on the sale has not yet been reached, and JACOS could still retain it.
The company also owns interests in undeveloped leases in Canada.
Hangingstone, a steam-assisted oil production site that began output in 2017, averaged 23,000 barrels per day (bpd) in the first four months of this year, according to the Alberta Energy Regulator.
Overall deal activity involving North American energy companies has accelerated as crude oil prices have surged after crashing last year during the pandemic.
Calgary-based ARC Resources, which in March bought rival Seven Generations Energy in a C$2.7-billion deal, has sold its Alberta’s Pembina Cardium assets to privately held Ricochet Oil Corp for around C$100 million, four sources familiar with that transaction told Reuters.