Chevron Canada gets offshore energy deal

CALGARY — Chevron Canada Ltd., a big player in Canada’s offshore oil industry, has struck a deal with Norwegian and Spanish oil companies to carry out exploration off the coast of Atlantic Canada and in the Far North.

CALGARY — Chevron Canada Ltd., a big player in Canada’s offshore oil industry, has struck a deal with Norwegian and Spanish oil companies to carry out exploration off the coast of Atlantic Canada and in the Far North.

The agreement with Statoil and Repsol will boost exploration in the Orphan and Flemish Pass basins off the coast of Newfoundland and Labrador, the Calgary company said Thursday.

Meanwhile, Chevron (NYSE:CVX) and Statoil — a big offshore player in the North Sea — have finalized a separate deal to explore for energy in the Canadian part of the Beaufort Sea.

Chevron Canada said new joint ventures over large blocks in deep water represent important strategic steps for all three companies.

“These agreements significantly strengthen our exploration position in Atlantic Canada and in the Beaufort Sea and reaffirm our commitment to achieving long-term growth in Canada,” Chevron Canada president Jeff Lehrmann said in a release.

“We look forward to working with Statoil and Repsol to achieve exploration success in these highly prospective basins.”

Statoil said the deals add new exploration acreage to the company’s already extensive Arctic portfolio.

“Strengthening our position in the Flemish Pass Basin and obtaining early entrance to the Orphan Basin and Beaufort Sea provides us access to large potential resources and increases the optionality of our exploration portfolio,” said Tim Dodson, executive vice-president for exploration for Statoil Canada Ltd..

Repsol E&P Canada Ltd. said the agreements reflect the company’s “commitment to expanding its presence in North America, and in particular Canada’s East Coast.”

The Atlantic offshore already has major fields such as Hibernia, Terra Nova and While Rose, producing oil for the Canadian and global refinery markets and boosting the Newfoundland economy.

Natural gas is produced from Sable Island off Nova Scotia.

In Thursday’s joint venture deals:

— Repsol and Statoil will be part of a farmout on a planned 2012 Orphan Basin exploration well. Chevron will operate the project with 65 per cent equity, while Repsol will have 20 per cent and Statoil 15 per cent.

— Statoil will be the operator with 50 per cent equity interest in the Flemish Pass Basin. Chevron has 40 per cent and Repsol 10 per cent.

— In the Beaufort Sea farmout deal, Statoil will participate with Chevron in a Beaufort Sea 3D seismic exploration program, tentatively scheduled for this summer.

Chevron is one of Canada’s major oil companies, with stakes in oilsands projects and shale gas developments in Alberta and a minority interest in the Hibernia development off Newfoundland.

The company also has resource interests in the Mackenzie Delta and Beaufort Sea in the western Arctic and a refinery and gas station network in British Columbia.

The company had total daily production in 2010 from Canadian operations of 223,000 barrels of crude oil, 30 million cubic feet of natural gas and 126,000 barrels of synthetic oil from oilsands.

Chevron Canada is a unit of San Ramon, Calif.-based Chevron Corp., one of the world’s biggest integrated oil companies.

Statoil is based in Oslo, Norway and has 20,000 employees in 36 countries around the world. The company has more than 35 years of experience from oil and gas production on the Norwegian continental shelf.

Repsol of Spain is a big producer and refiner with 40,000 employees and operations in 30 countries, It is the largest oil company in Latin America, has made oil discoveries off the coast of Brazil and also has other exploration interests off the Atlantic coast of Canada.

Thursday’s offshore exploration announcement comes a day after the company warned that its fourth-quarter profit will be “significantly” below third-quarter earnings, partly because of weaker margins on refining and selling fuels.

The oil giant said Wednesday that its usually profitable refining and marketing business will roughly break even. Refinery volumes in the U.S. and overseas dropped from the third quarter, and refining margins fell sharply on the U.S. Gulf Coast.

In Thursday trading on the New York Stock Exchange, Chevron Corp. shares fell $2.87 to US$104.90 on the Toronto Stock Exchange

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