Friday, June 29, 2007

China's Largest Oil Producer Goes For Canadian Oil Sands

Sinopec's fellow Chinese explorer, China National Petroleum Corp. (CNPC), has joined it and CNOOC in moves into hard-to-get Canadian oil sands, the Wall Street Journal reoorted today:

China CNPC Buys
Exploration Rights
To Canada Oil Sands
June 29, 2007 7:23 a.m.

BEIJING -- 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, which is estimated to contain some two million barrels of an extremely thick, and hard-to-process form of oil called bitumen.

CNPC will join China's other two biggest oil companies, Sinopec Group and Cnooc Ltd., in investing in Canada's oil sands.

An official at CPC subsidiary China National Oil and Gas Exploration and Development Corp. confirmed that the company would explore for oil in Canada, but declined to offer any more details. According to a statement the Chinese Ministry of Commerce posted on its website Friday, officials at 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 were not disclosed.


Developing Canada's tar sands can be very costly because of the complicated process needed to pull it out of the ground and then upgrade it into something more easily refined into fuel. But the continued high level of international oil prices -- plus China's growing demand for oil -- is making them more economical to develop.

--Renya Peng in Beijing and Ellen Zhu in Shanghai contributed to this article

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