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Financial Times: Western Oil seeks partner

By James Politi in New York Published: November 30 2006 02:00 | Last updated: November 30 2006 02:00

Western Oil Sands, the Canadian energy company, may be looking for a downstream partner to help it better exploit its main asset, a 20 per cent stake in the $5bn Athabasca oil-sands venture.

Western said it had hired engineering advisers and bankers at TD Securities and Goldman Sachs to help weigh “various initiatives and options, including downstream integration of Western’s oil sands resources”.

However, the company sought to damp speculation that it was interested in a takeover by Shell Canada or Chevron, the other partners in Athabasca.

“Western has not received an offer for the company and is currently not in any discussions with respect to any such transaction,” it said.

Instead, Western might be looking to strike a deal similar to rival EnCana’s move last month to create a $10.7bn joint venture with ConocoPhillips. The transaction was aimed at providing EnCana with a partner to provide it with the refining capacity it needs to turn its heavy oil into petrol and other products for the US market.

Canada’s oil sands, mainly located in the western province of Alberta, have experienced a boom as the cost of extracting the heavy oil finally became palatable because of high oil prices.

In addition to Athabasca, Western is also seeking exploration and production opportunities in northern Iraq.

Copyright The Financial Times Limited 2006

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