Japanese state-backed oil producer Japan Petroleum Exploration Co (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 told Reuters.

Japanese oil producer eyes Canada divestment as M&A picks up- oil and gas 360

Source: Reuters

Several global oil majors have rushed to sell their 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 the majority owner of Hangingstone, with Chinese state-owned oil giant CNOOC (NYSE:CEO) 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.

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 which began output in 2017, averaged 23,000 barrels per day in the first four months of this year, according to the Alberta Energy Regulator.

Separately, 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.

The deal enables it to focus on becoming a pure-play Montney producer, one of the sources said.

ARC declined to comment and Ricochet did not respond.

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