BP and Husky Energy Partner in Oil Sands Project

BP (BP) and Husky Energy have formed a partnership to extract crude from Alberta's oil sands. The two companies will spend about $5.5 billion through 2015 to bring the oil to the markets. The project will be developed in three stages and could reach an output of 200,000 barrels a day between 2015-2020. "It's a bit of a turnaround in strategy for BP, who has not previously been involved with oil sands," said ING analyst Jason Kenney. "It's a positive thing because of the integrated nature of the project. It's not a minor investment, nor is it over the top in oil sands, which have seen costs escalate." BP had been the only company out of all the oil majors without a major investment in oil sands. Alberta's oil sands hold the second largest oil reserves in the world behind Saudi Arabia, the Canadian government estimates. Shares of both companies moved higher on the news: BP traded 1.8% higher and Husky gained 5.5%.

Sources: Bloomberg, Reuters
Additional Reading: 60 Minutes Story on Oil Sands

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