CALGARY - A Japanese oil company is moving ahead with a $1.4-billion expansion to an oilsands project in which Nexen Inc. — soon to be acquired by China's CNOOC Ltd. — is a minority partner.
Japan Petroleum Exploration Co., or Japex, plans to increase output at its Hangingstone project to 20,000 barrels per day, compared with the 6,000 to 7,000 it currently produces.
Once that expansion phase starts up, Japex says it will decide on whether to expand production to 30,000 barrels a day.
Japex holds 75 per cent of the Hangingstone project, south of Fort McMurray, Alta., with Calgary-based Nexen Inc. (TSX:NXY) owning the rest.
The partners won Alberta government approval for the project last month and aim to start producing oil in the first half of 2016.
A week ago, Ottawa approved state-owned CNOOC's $15.1-billion takeover of Nexen, though that deal must still win U.S. government approval before it can close.
In making the decision, Prime Minister Stephen Harper said takeovers by state-owned firms in the oilpatch will be limited from now on, especially when it comes to the oilsands. However, investment through joint venture partnerships is still welcome.
Japex started off as a state-owned company in the 1950s, but it was reorganized into a private exploration and production company in 1970.