China buys Canadian oil producer

[Bad_Daddy 2,209]

http://www.bbc.co.uk/news/business-14214771

Chinese state oil company CNOOC has agreed to buy Canadian oil sands producer OPTI for $2.1bn (£1.3bn).

The deal - which must be approved by regulators - is the latest move by state-run Chinese firms to buy stakes in North American oil producers.

Canada's Alberta province is believed to have the third-largest reserves of oil in the world.

However it is far more expensive to extract oil from Canada's oil sands than from conventional fields.

CNOOC says it will pay OPTI shareholders $34m, but will also take on the firm's $2bn worth of debt.

The firm's main asset is a 35% stake in the Long Lake oil sands project in Alberta.

OPTI says the deal will allow it to continue to invest further in the project.

"CNOOC is a technically experienced and well capitalised company," said OPTI chief executive Chris Slubicki.

China expansion

The International Energy Agency (IEA) predicts that in the next five years almost half of global oil demand growth will come from China.

Rising demand for oil and significant cash reserves have led Chinese energy firms to buy into foreign oil reserves.

"We are pleased to expand our presence in the oil sands business," said CNOOC chief executive, Yang Hua.

In 2005 the firm bought a 17% stake in Canadian oil sands firm MEG Energy. CNOOC has also obtained minority stakes in oil projects in Texas and Colorado.

CNOOC is not the only Chinese state oil firm investing in the region.

In 2009 PetroChina bought a $1.7bn share in Athabasca Oil Sands, and Last year Sinopec paid $4.6bn for a 9% share of Syncrude, Canada's largest oil sands producer.

The IEA estimates that by the end of 2010 Chinese state energy companies operated in 31 nations and held shares in oil firms in 20 of those countries.

Environmental concerns

Environmentalists have criticised extracting oil from sand and clay which leads to higher carbon emissions than conventional production.

Such concerns may affect demand for crude from oil sands in the US and Europe where new environmental regulations are planned.

California recently announced new low-carbon fuel standards and plans for a new pipeline from Alberta to Texas have been delayed.

Most oil from Alberta is currently exported to the US.

However a second proposed pipeline would take oil to Canada's pacific coast making it easier to export to China instead.

Edited July 25, 2011 by Why_Me

[mawilson 2,133]

Why do you think it's newsworthy? China has been buying oil companies all over the globe.

[Bad_Daddy 2,209]

Why do you think it's newsworthy? China has been buying oil companies all over the globe.

I thought you smarter than this....

This is Canada and Canada was suppose to be the savior to the US oil supply problems via a pipe line. Now that oil is going to go to China. Tell me...do you think it's easier and cheaper to ship that oil in from the middle east via oil tanker or pipeline from our neighbors next door?

Do you think this country is powered by those windmills Steven is always posting about?

[mawilson 2,133]

I thought you smarter than this....

Oil is a global commodity. The US sells oil to China. Canada sells oil to China. Canada sells oil to the US. The US sells oil to Canada.

Get it?

[^_^ 5,021]

The presence of American companies in the Middle East must mean all Middle Eastern oil comes to America and the Chinese and Euros get cut out of the action.

Except it doesn't mean that at all

[Bad_Daddy 2,209]

Oil is a global commodity. The US sells oil to China. Canada sells oil to China. Canada sells oil to the US. The US sells oil to Canada.

Get it?

You should try reading up on a subject before you try and tackle it. That's the third largest oil field in the world. The US has been trying to get a pipeline built from Canada to the US for years now but the enviro freaks have put postponed it. It's the equivelent to the Cuban missile crisis in some ways.

btw the US oil that's sold is low grade oil...oil that cost a fortune to refine for gasoline. The oil in that Canadian field could have run this country for years and then some.

####### do you think makes this country run ?

[mawilson 2,133]

####### do you think makes this country run ?

Electricity, which is 45 percent coal, 25 percent natural gas and 20 percent nuclear.

If we could switch to electric cars, we wouldn't need much oil.

[Obama 2012 1,714]

You should try reading up on a subject before you try and tackle it. That's the third largest oil field in the world. The US has been trying to get a pipeline built from Canada to the US for years now but the enviro freaks have put postponed it. It's the equivelent to the Cuban missile crisis in some ways.

btw the US oil that's sold is low grade oil...oil that cost a fortune to refine for gasoline. The oil in that Canadian field could have run this country for years and then some.

####### do you think makes this country run ?

mawilson is right...

we don't exactly keep all of our oil.

You can like it or not, but it doesn't matter who we buy it from. We're going to pay the same amount.