The Fort Hills Energy L. P. ("The Partnership") announced Friday that it has reached an agreement with the Government of Alberta to extend the term of the Fort Hills oil sands leases, located 90 kilometers
north of Fort McMurray, Alberta. In exchange for a commitment to upgrade in
Alberta the bitumen produced from the second phase of the Fort Hills Project,
the agreement provides for extending the Fort Hills leases until 2019.
"Fort Hills is truly a made-in-Alberta project that we have been working
hard to deliver - but the current economic climate has slowed us down," said
Neil Camarta, Petro-Canada's senior vice-president of Oil Sands. "We are very
pleased that the province of Alberta has agreed to a compromise that gives us
the additional time to make this project a reality."
In November 2008, the Partnership announced the deferral of the final
investment decision on the mining portion of the Project until a cost estimate
consistent with the current market environment can be established. The
Sturgeon Upgrader ("Upgrader") portion of the Project was put on hold and a
decision on whether to proceed with the Upgrader will be made at a later date.
The Partnership consists of Petro-Canada with a 60% interest, UTS Energy
Corporation with a 20% working interest and Teck Cominco Limited with a 20%
interest, with Petro-Canada Oil Sands Inc., a wholly owned subsidiary of
Petro-Canada, as the contract operator for the Project.
Petro-Canada is one of Canada's largest oil and gas companies, operating
in both the upstream and downstream sectors of the industry in Canada and
UTS Energy Corporation is focused on growing and developing oil sands
assets. The Calgary-based company was instrumental in re-establishing the Fort Hills Oil
Sands Project and is the principal founder of the Fort Hills Energy
Teck Cominco Limited is a diversified mining company, headquartered in
Vancouver, Canada. The company is a world leader in the production of zinc and metallurgical coal and is also a significant producer of copper, gold, indium and other specialty metals.