China Eyeing Oil Sands Deals Of Any Size

Posted on Saturday, April 16 at 15:36 by Perturbed
Mr. Hou was speaking to reporters late Wednesday after a presentation in Calgary that was organized by Calgary investment firm ARC Financial Corp. and the law firm Heenan Blaikie LLP. During his speech, Mr. Hou said the $150-million invested by China National Offshore Oil Corp. (CNOOC) -- China's international energy company -- in oil sands upstart MEG Energy Corp. was "probably" going to be followed by more deals. He said he hoped a second deal will be bigger than the first and "the third one will be much bigger." Yesterday, pipeline company Enbridge Inc. announced a preliminary deal with PetroChina Co. Ltd. for half the supply on the proposed $2.5-billion Gateway line, which is supposed to move 400,000 barrels of oil sands crude to the West Coast for export. Chinese companies have made inquiries about the oil sands for several years and last year visited Alberta with a long list of detailed questions, leading to months of speculation about what sort of moves the giant and increasingly powerful country would make. Enbridge's connection with China had been widely expected. Mr. Hou said securing oil supplies for his energy-hungry country is China's chief goal. "The more sources of import, the more safe" those supplies are, Mr. Hou said. He added that prices for assets in North America are "slightly high," but the continent's political stability and strong rule-of-law are "one of the most important factors for [China's] investment decisions." China, however, has invested throughout the world and has close connections with countries such as Iran and Sudan. Mr. Hou said China was in dealings with 70 foreign oil companies in 18 countries, as of last December. CNOOC said it invested in MEG for the small company's long-term growth outlook and because of the chance to learn more about oil-recovery technology, which could also be used in China. Mr. Hou said China is in general looking to Canada for both reserves of oil and technology sharing. During his speech, Mr. Hou said China is predicting an increasing gap between its oil demand and domestic production through at least 2020, underscoring the country's need to look for more sources of crude beyond its borders. Up until 1993, China produced enough oil to supply its own needs..... www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050415/RSINOPEC15/TPBusiness/TopStories

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