UPI Energy Watch

Canadian oil producers eye U.S. refineries

Canadian Natural Resources Ltd. and EnCana Corp. are looking to secure more refining joint ventures to send bitumen to the United States for processing.

Steve Laut, president of Canadian Natural Resources Ltd., said Canadian companies could export more if there were new pipelines to the Gulf Coast.

"The (U.S.) refiners really want more heavy oil," Laut was quoted as saying by the Star Phoenix on the first day of the Canadian Association of Petroleum Producers' annual investment forum.

"I expect the refiners will make something happen," he said.

Randy Eresman, chief executive of EnCana Corp., said his company would consider more tie-ups with big U.S. refiners to take additional output from future oil sands expansions.

EnCana, which secured a venture earlier this year with ConocoPhillips to supply refineries in Illinois and Texas with in-situ oil sands from Alberta's Foster Creek and Christina Lake, is considering similar arrangements on future projects, Eresman said.

"We could consider a deal with another party, whether it's in Western Canada or in a refinery in the U.S.," he said. "Everything is on the table."

Kremlin, TNK-BP still in license row

If Gazprom were to acquire a stake in the Kovykta gas project, the ongoing dispute between the Russian government and TNK-BP would be resolved, Yuri Trutnev, Russian natural resources minister, was quoted as saying by Russian news agencies.

Russian authorities are criticizing Kovykta operator RUSIA Petroleum, which is majority owned by TNK-BP, for not producing as much natural gas as it was supposed to produce under an agreement.

"If the problem of the Kovykta gas being put into Gazprom's system can be resolved, that would enable the license to be reexamined," Itar-Tass quoted Trutnev as saying.

"If they resolve this problem by including Gazprom in the project or in another way, this problem will be resolved," Interfax quoted Trutnev as saying.

To many foreign investors, the Kovykta spat is reminiscent of the Sakhalin-2 project, where Royal Dutch Shell lost control of the $20-plus billion liquefied natural gas development project to Gazprom last December after the Russian authorities threatened to withdraw its license for environmental reasons.

Kansas oil refinery to launch IPO

CVR Energy Inc., located in Coffeyville, Kan., wants to raise $282.35 million by selling 15.5 million new shares, or about 19 percent of the now privately owned company to launch an initial public stock offering.

This is the second attempt in two years to launch an IPO, the Kansas City Star reported.

Though based in Sugar Land, Texas, its main business is operating the Coffeyville refinery and associated fertilizer plants.

Farmland Industries Inc. owned part of properties until it broke apart in its 2002 bankruptcy reorganization. Coffeyville's refinery dates back to 1906, and in 1944 it became part of the cooperative group that became Farmland Industries.

After an investor group bought the refinery and fertilizer operations in a 2004 bankruptcy court sale, it filed a public stock offering less than a year later, hoping to raise as much as $300 million as Coffeyville Resources Inc., which was based in Kansas City, Kan.

Instead, Moody's Investors Service bought the refinery in June 2005 in a private transaction for approximately $720 million.

Now, CVR Energy expects to sell new shares at $20 and generate $282.35 million after fees. The offering price will be set at the time the shares are sold, the report said.

--

Closing oil prices, June 19, 3 p.m. London

Brent crude oil: $72.04

West Texas Intermediate crude oil: $68.79

--

(e-mail: AMihailescu@upi.com)