Nexen spending up to $3.2B on 2012 projects

Sells a chunk of its BC shale gas assets to Japanese energy firm

November 29, 2011   by The Canadian Press

CALGARY: Energy company Nexen Inc. has struck a deal with a Japanese company to sell a chunk of its BC shale gas assets and announced plans to spend up to $3.2 billion to advance its various projects in 2012.

The Calgary company is selling about 40% of its northeastern BC shale gas assets to a group led by Inpex Corp., a Japanese oil and gas company.

Nexen will remain the operator of the shale gas fields – in the Horn River, Cordova and Liard basins in northeast BC. The deal will close in the 2012 first quarter.

The joint venture continues a trend that has seen companies from China, Japan and South Korea seek partnerships to develop Canadian natural gas production, with the goal of eventually shipping that gas to Asia by tanker when LNG processing plants and ports are eventually built along the West Coast.

The Japanese investment announcement came as Nexen revealed its 2012 production, cash flow and capital investment plans.

Nexen said capital expenditures on its projects are expected to come in between $2.7 billion and $3.2 billion for the year.

Overall production before royalties are expected to be about flat relative to production this year, with production between 185,000 and 220,000 barrels of oil equivalent before royalties. Year-to-date production is approximately 206,000 boe.

Nexen is one of Canada’s most international energy companies, with operations in the oilsands, natural gas region of Western Canada and global operations in the Gulf of Mexico, North Sea, Africa and the Middle East.

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