PetroChina buys control of Canada oil sands project

Tue Jan 3, 2012 3:50pm EST
 
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - PetroChina (601857.SS: Quote) became the first Chinese state-owned company to wholly own a Canadian oil sands development after agreeing on Tuesday to buy out its partner's stake in a newly approved project for C$680 million ($674 million).

Calgary-based Athabasca Oil Sands Corp ATH.TO said it exercised an option to sell its 40 percent interest in the MacKay River project in northern Alberta to PetroChina so it could free up money to concentrate on some of its other oil sands and light crude projects.

After the project won regulatory approvals last week, the partners had 30 days to decide to exercise put and call options on Athabasca's stake. They have a similar arrangement with a larger, nearby project still awaiting a go-ahead from regulators.

Athabasca shares rose 26 Canadian cents, or 2 percent, to C$12.75 on the Toronto Stock Exchange.

"Now you can look forward with a bit more clarity on what they're going to be up to in the next couple of years as opposed to wondering whether or not they're staying in the joint venture," FirstEnergy Capital Corp analysts Michael Dunn said.

"Whenever you remove uncertainty, it's usually good for a stock."

The investment came as state-owned Sinopec (0386.HK: Quote) said it will spend $2.2 billion on stakes in U.S. shale properties owned by Devon Energy Corp (DVN.N: Quote), showing China's appetite for unconventional energy resources in North America is far from being satiated.

PetroChina is expected to start work this month at MacKay River, which is scheduled to begin producing 35,000 barrels a day by 2014, at a cost of around C$1.3 billion. Eventual output could hit 150,000 bpd.   Continued...