Norway’s Statoil is stepping up its exposure to the environmentally controversial extraction of oil from Canadian sands, paying about $200 million to take full control of some assets it had previously shared with Thai energy firm PTTEP.
State-controlled Statoil said on Thursday the two firms had agreed to divide their interests in the 1,100 square-km (425 square miles) Kai Kos Dehseh (KKD) oil sands project in the Canadian province of Alberta, which could produce 200,000 barrels per day once fully developed.
The deal will give Statoil, which has come under fire from environmental groups for its Canadian sands investments, two licences covering the most developed parts of the project. PTTEP will take the other three licences, and said it would accelerate development of its part of the project, which covers about 610 square km (235 square miles).
Producing oil from oil sand is energy intensive, resulting in greenhouse gas emissions up to four times higher than for conventional oil. But Statoil has defended the project, arguing it follows the strictest environmental guidelines.
Under the deal, Statoil will get full control of the Leismer licence, the only producing asset in the project, now operating at a capacity of 20,000 barrels per day.
It will also get the Corner project, which it considers mature and ready for a final investment decision after the deal closes. At 1205 GMT, Statoil shares were up 1.5 percent at 150.9 Norwegian crowns. Around 97 percent of Canada’s 179 billion barrels of oil reserves are in oil sands, Statoil said.