Canadian natural gas producer EnCana Corporation has reached an agreement to sell its entire Ecuadorian oil and pipeline interests to a consortium of Chinese petroleum companies for just under $1.5 billion.
EnCana will divest all of its shares in subsidiaries which have oil and pipeline interests in Ecuador to local company Andes Petroleum Company, the joint venture vehicle of a party of Chinese petroleum companies, believed to include China National Petroleum, for approximately $1.42 billion cash.
The sale, which is dependent on gaining approval from the Government of Ecuador, will have an effective date of July 1, 2005 and is expected to close before year-end.
In revealing the agreement Encana said that the proceeds from the sale are expected to be directed to debt reduction and the continuation of a share purchase program.
This planned sale marks essentially the final step in sharpening the focus on our unparalleled portfolio of unconventional natural gas and oil resources in North America. It is also about concentrating our efforts and investment where we have clear competitive advantage, said Gwyn Morgan, EnCana’s president & CEO.