CNOOC wraps up Opti deal to expand in oil sands

Mon Nov 28, 2011 10:45am EST
 
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(Reuters) - CNOOC Ltd (0883.HK: Quote) closed its C$2.1 billion ($2.04 billion) acquisition of Opti Canada Ltd OPC.V on Monday, giving China's top offshore oil company its second stake in a Canadian oil sands property.

With the close, CNOOC gains a 35 percent stake in the troubled Long Lake oil sands project, which operates well below its 72,000 barrels per day capacity as operator Nexen Inc NXY.TO works to overcome problems with the C$6.1 billion project's reservoir.

Long Lake's poor performance forced Opti to seek court protection from creditors in July. CNOOC acquired the company after agreeing to assume Opti's C$2 billion debt and paying C$34 million to the company's shareholders.

Opti is CNOOC's second step into Canada's vast oil sands, the world's third-largest crude oil deposit behind Saudi Arabia and Venezuela, but the largest open to private investment. The company also has a 14 percent stake in MEG Energy Corp (MEG.TO: Quote) which operates an oil sands project in northern Alberta.

Since CNOOC first acquired its stake in MEG in 2005, Chinese oil companies have spent more than C$18 billion on Canadian oil sands properties, mostly buying minority stakes in existing projects.

While China's oil companies have often faced regulatory, political and procedural hurdles as they scour the globe for the energy resources to feed the country's fast-growing economy, the Canadian government has welcomed their investment in the oil sands as it seeks a broader trading relationship with the country.

($1=$1.03 Canadian)

(Reporting by Scott Haggett in Toronto; editing by Rob Wilson)