By John Tilak and David French
TORONTO/NEW YORK (Reuters) – Chevron Corp (CVX.N: Quote), the second-largest U.S.-based oil producer, is exploring the sale of its 20 percent stake in Canada’s Athabasca Oil Sands project, which could fetch about $2.5 billion, according to people familiar with the situation.
The company has discussed with investment banks the prospect of selling the stake in the western Canadian oil sands project, a source said.
Chevron does not find the oil sands business appealing in the current environment, as low oil prices make it more challenging for global producers to generate profits, the people said, declining to be named as the matter is confidential.
The California-based company is close to making a decision, taking into account factors such as price, the sources added.
Canadian Natural is seen as a logical buyer as it will be the majority owner and operator of the Athabasca Oil Sands project once the Shell deal closes, the people said.
A Chevron spokesman and a Canadian Natural spokeswoman declined to comment.
The move comes as international players are pulling back from the Canadian energy market, particularly the capital intensive oil sands. A range of factors are contributing to investor apathy toward Canada, including weak oil prices, the higher cost of Canadian operations compared with cheap U.S. shale plays and limited export pipeline capacity out of western Canada.