PetroChina to seal takeover of Athabasca oil sands project by end-Sept-source

Mon Aug 4, 2014 5:45am EDT
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By Charlie Zhu

HONG KONG Aug 4 (Reuters) - State oil giant PetroChina plans to pay the more than $1 billion it needs to complete a takeover of the Dover oil sands project from Canadian firm Athabasca Oil Corp by the end of September, a person with knowledge of the deal told Reuters.

PetroChina was supposed to complete the acquisition of Athabasca Oil's 40 percent stake in the project in June, but delayed the payment while it reassessed the deal amid a government-led corruption probe into the Chinese national oil company, the person said.

The internal review showed the geological structure of the project is more complicated than previous estimates, which would increase development costs, but the acquisition will go ahead, the person added.

"The next step is to complete the transaction," said the source, who declined to be named as he was not authorised to speak to the media. "PetroChina will pay in August or September."

Asked about the deal, PetroChina spokesman Mao Zefeng said: "At the moment, there is not any sign that PetroChina will not proceed with the project." He declined to comment further.

Officials at Calgary-based Athabasca Oil declined to comment on the payment.

Shares in Athabasca Oil tumbled last week after it said it was still trying to collect the C$1.23 billion payment owed to it by a unit of PetroChina, Phoenix Energy Holdings Ltd, for the stake in the Dover project.

The delay triggered speculation that the deal may have been scrapped as the Chinese government investigates about a dozen former senior executives at PetroChina and its parent China National Petroleum Corp for alleged graft, including Beijing-based Song Yiwu, deputy head of CNPC's overseas operations.   Continued...