News

Value Creation Inc., the embattled oil sands company that was just days away from a critical debt deadline, has selected a company it hopes to form a "strong partnership" with. Columba Yeung, the founder and chairman of the privately owned company, declined to comment on reports that Reliance Industries Inc., India's biggest public company, had submitted a bid. "We have multiple offers, but at this point in time we are particularly focused on one of the partners," he said.

A report on U.S. news network CNBC said that Reliance had bid $2-billion for Value Creation, which has one of the largest holdings of oil sands leases and has also developed innovative new technology for processing bitumen. Investment banking sources in Calgary said, however, that that figure was wildly inflated, and that Value Creation is contemplating an asset deal rather a sale of the company. They also cast doubt on Reliance's status as front-runner.

A major European oil company is also rumoured to have bid, likely either BP PLC, which may covet Mr. Yeung's processing technology, or Total SA, whose Joslyn Creek oil sands lease abuts Value Creation's Fort McMurray-area property. Mr. Yeung declined to comment, saying only that developing Value Creation's huge resource will "require a lot of capability. ... So we do look at a partner with strengths beside financial capability."

Sources said Mr. Yeung, the entrepreneurial engineer who has been the heart of the company, will stay on, and Value Creation will maintain its intellectual property. Mr. Yeung owns more than 50 per cent of the company, which acquired about $450-million in debt, and faces a Feb. 15 deadline to negotiate an agreement with creditors. If it is unsuccessful, it could face either entering CCAA bankruptcy protection or having creditors take over its assets.