Nexen Inc. may sell as much as C$500 million ($492 million) of assets, including power plants, to “streamline” the company’s portfolio, Chief Executive Officer Marvin Romanow said.
The Canadian oil producer, which has declined 28 percent this year, is considering asset sales after experiencing setbacks with oil-sands projects, Romanow said in an interview today at Bloomberg headquarters in New York. The company, based in Calgary, has had slower-than-expected growth from its Long Lake project in Alberta, he said.
“We have a number of power plants just as a result of them being attached to facilities that we process oil and gas through,” he said. “We don’t have to be owners of power plants given the rest of our opportunities.”
Nexen owns a cogeneration plant that supplies power to its Long Lake oil-sands project. It co-owns the 120-megawatt, natural-gas-fueled Balzac power plant with Encana Corp. on the outskirts of Calgary, Pierre Alvarez, vice president of corporate relations, said in a phone interview. It also co-owns the 70.5-megawatt Soderglen wind farm in southwestern Alberta with Transalta Corp.
Romanow said the company will reduce debt with cash flow from Inpex Corp. and JGC Corp., Tokyo-based energy companies that agreed to pay more than C$350 million for a stake in Nexen’s British Columbia gas fields.
Nexen fell 0.6 percent to C$16.08 at the close in Toronto.