CNPC Signs Canadian Oil-Sands Agreement
2007-07-02
The Wall Street Journal
http://english.cri.cn/3130/2007/07/02/262@244638.htm
In a sign of the expanding international ambitions of China's oil companies, China National Petroleum Corp. has bought the rights to explore for oil in Canada.
The state-owned parent of Hong Kong- and New York-listed PetroChina Co. will develop an oil-sands field that is estimated to contain about two billion barrels of a thick and hard-to-process form of oil called bitumen.
CNPC will join with two other Chinese oil companies, Sinopec Group and Cnooc Ltd., in investing in Canada's oil sands.
An official at CNPC unit China National Oil and Gas Exploration and Development Corp. confirmed the company would explore for oil in Canada but declined to elaborate. According to a statement the Chinese Ministry of Commerce posted on its Web site Friday, officials in the Canadian province of Alberta granted the company exploration rights for 11 fields covering a total area of about 260 square kilometers in January. Financial terms weren't disclosed.
CNPC is China's largest producer of oil, and it has so far been the most aggressive in expanding abroad, with operations in Africa, South America and Central Asia. Two years ago, in the biggest overseas oil acquisition for any Chinese company, CNPC paid $4.2 billion for PetroKazakhstan, a Canadian oil company whose main asset was a field in Kazakhstan.
Developing Canada's tar sands can be costly because of the complicated process needed to pull bitumen out of the ground and then upgrade it into something more easily refined into fuel. But the high level of global oil prices -- plus China's rising demand for oil -- is making such fields more economical to develop.
