British Petroleum is keen to acquire a majority stake in Value Creation, which holds large reserves of oil sands.
The $1.2bn deal is expected to face opposition from environmentalists and some BP shareholders who consider the oil sand business to be expensive and harmful to the environment, according to Sunday Times.
The process of extracting fuel from the oil sands consumes huge amounts of energy and can be potentially damaging to the environment.
BP claims that its steam extraction technology is far less destructive than the traditional mining approach and has also invited several institutional investors to put forward its case.
Terre de Grace is Value Creation’s largest block of leases covering around 290 square miles in the Athabasca region of Alberta.
