China's biggest offshore oil producer CNOOC Ltd has taken a stake in a Canadian oil sands project expected to help expand the country's resource base for crude oil, the company said in a release seen yesterday.
The C$150 million (US$121 million) investment, made through CNOOC subsidiary CNOOC Belgium BVBA, gives the Chinese oil giant a 16.69 percent stake in Calgary-based MEG Energy Corp.
Privately-owned MEG owns a 100 percent working interest in oil sand leases on 13,300 hectares in Alberta, Canada. The holdings are estimated to hold 4 billion barrels of bitumen, a kind of tar, that can be processed to produce about 2 billion barrels of crude oil, CNOOC said.
Current high crude oil prices have prompted Chinese oil companies to consider alternative sources of oil to help meet surging demand.
"Lower operating costs and higher recoveries resulting from recent advances in technologies have made many similar projects economically viable," Yang Hua, CNOOC's chief financial officer, said in a statement.
CNOOC's chairman and chief executive officer, Fu Chengyu, said the skills learned in Alberta would be useful in exploiting oil sand and shale in China.
According to the Hong Kong newspaper South China Morning Post, China's two major onshore producers, China Petrochemical Corp and PetroChina are also negotiating purchases of oil sands assets in Alberta.
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