BP, Reliance vying for stake in Canadian firm

British energy major BP and Indian conglomerate Reliance Industries are in the race to buy a majority stake in a Canadian company Value Creation which has substantial reserves of the oil-rich sand deposits. BP is in talks to pay about $1.2 billion for a majority stake and Reliance Industries, the Indian conglomerate, is thought to have made a rival $2 billion takeover bid, but BP is understood to be the preferred partner.
BP, however, is likely to face fierce opposition from environmentalists and some of its shareholders, as they believe that the deal is expensive and environmentally damaging. Converting the oil in sand to usable fuel requires vast amounts of energy and destroys the landscape. BP claims its steam extraction technology is far less destructive than the traditional mining approach. BP might set up a joint venture with the Canadian group, and increase its oil sands holdings by as much as 50 per cent.
Value Creation is in financial trouble and faces being put into receivership today. Receivership is a type of bankruptcy that a company enters into when a 'receiver' is appointed by bankruptcy courts or creditors to run the company.