Canada’s Athabasca Oil in $4-bn oil sands JV with Kuwait Petroleum

Canadian crude producer Athabasca Oil Corp has signed a memorandum of understanding for entering into a joint venture with Kuwait Petroleum Corp for developing its Hangingstone and Birch properties in Alberta.

After a report appeared in The Globe and Mail yeterday, the Calgary-based company said in a filing with the Canadian regulator, Investment Industry Regulatory Organization of Canada (IIROC), it ''confirms that it has signed a letter of intent that contemplates a joint venture involving Athabasca's Hangingstone and Birch properties.''

Without naming the potential JV partner, Athabasca said the deal is conditional upon, among other things, finalisation of definitive documentation and the receipt of all necessary internal and regulatory approvals, but gave no assurance that it will be completed.

The Globe and Mail yesterday reported that Kuwait's state-controlled oil company Kuwait Petroleum Corp. may invest as much as C$4 billion ($4.05 billion) for a joint venture to develop some of Athabasca's oil sands properties in northern Alberta.

The report further added that Kuwait's Ambassador to Canada, Ali al-Sammak, confirmed in an interview that senior Kuwait Petroleum officials signed a memorandum of understanding earlier this month and a final agreement is expected in October.

''It's a plus-or-minus $4-billion deal and in October they'll be coming back to follow up what has been signed,'' al-Sammak is said to have said in a telephone interview.