By Shariq Khan

Sep 7 – Repsol has agreed to sell some 38,000 hectares of oil and gas producing land in Alberta to Teine Energy, backed by the Canada Pension Plan Investment Board, three sources close to the government told Reuters on Tuesday. case.

The Spanish oil company will make up to C$400 million ($304.65 million) from the sale, one of the sources said.

Repsol and Teine have sought regulatory approvals for the deal and expect to receive them by the end of September, the sources said. They warned there is no certainty Alberta regulators will clear the proposed transaction and the deal could fall through.

The Canada Pension Plan Investment Board (CPPIBfor its English acronym) declined to comment, while Repsol and Teine Energy did not respond to requests for comment.

The possible sale includes Repsol’s heavy oil and gas production assets and the midstream infrastructure that supports them, such as a network of some 1,800 kilometers of pipelines, the sources added. They requested anonymity to discuss the confidential negotiations.

Reuters reported in February that Repsol was considering selling some of its Canadian assets, aiming to take advantage of an oil and gas windfall.

The sale would also allow Repsol to divert money and effort to more prolific shale regions, such as the Eagle Ford shale field in the United States, or to stimulate investment in renewable energy, said the sources.

Energy prices have fallen in recent weeks, but remain high. Global benchmark Brent crude is up more than 20% so far this year, trading around $93 a barrel on Tuesday.

This rise prompted major oil companies to sell assets in Canada, the fourth largest oil producer.

Exxon Mobil Corp and its Canadian unit Imperial Oil Ltd sold their joint venture in June. XTO Energy Canada to Whitecap Resources Inc for C$1.9 billion ($1.5 billion), while the Japanese JAPEX it sold its stake in the Hangingstone oil sands project last year.

Repsol’s website lists Chauvin as one of its top heavy oil assets, although the company last did new drilling on the ground at least four years ago, the sources say. Repsol’s production in this area is around 6,800 barrels of oil equivalent per day, according to the sources.

Following the sale of the Chauvin asset, Repsol will continue to hold land in other gas fields in Canada and power infrastructure, among other assets.

($1 = 1.3135 Canadian dollars)