Nexen to spend $2.5B next year
Also plans $1B in asset sales
Calgary-based Nexen Inc. said Wednesday it plans to spend $2.5 billion next year on capital projects in Canada and abroad.
The oil and gas company also plans to sell about $1 billion in assets that don't fit with its most profitable operations.
The sales will take place over the next year to two years, depending upon market conditions.
Nexen operates in Alberta, British Columbia and the U.K. North Sea.
It said it would spend $1.8 billion on conventional development and exploration and $200 million on unconventional shale gas projects, particularly in British Columbia. New technology to create large fractures and produce more gas has made previously inaccessible shale formations feasible.
Nexen will spend $400 million on oilsands development in Alberta, including $100 million at the Syncrude partnership, but the biggest oilsands spending will be at its Long Lake project in the Athabasca oilsands, which it is developing in partnership with Opti Canada Inc.
Technical problems have kept Long Lake's production below target, but that’s now improving, according to CEO Marvin Romanow.
"Steaming reliability has improved, and this is leading to higher bitumen production," Romanow said in a statement. "We are confident that we will ramp up to full rates and demonstrate the significant value this project will deliver to our shareholders."
Among the assets it wants to sell are parts of its marketing business, heavy oil assets in Western Canada and an interest in the Canexus chemicals business.