China Tapping Canadian Oil Sands

Posted July 20th, 2011 at 9:55 am (UTC-5)
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China's biggest offshore oil producer could soon have access to Canadian oil reserves.

CNOOC announced Wednesday it plans to buy Canadian oil sands producer OPTI Canada in a deal valued at $2.1 billion.

The deal needs approval from regulators in both countries before it can be completed but would give CNOOC access to 195 million barrels of proven oil reserves in the Athabasca region of northern Canada.

The area has some of the world's largest oil reserves but much of the oil is trapped in sand, creating a tar-like substance called bitumen. Extracting the oil often requires using the largest shovels, cranes and trucks on earth to dig it out and then send it to refineries.

Chinese oil and gas companies have increasing looked to the U.S. and Canada for energy resources.

Earlier this year, CNOOC, invested more than $1 billion in a project to extract oil and gas from shale deposits at two sites in the western United States. That project, operated by American-owned Chesapeake Energy Corp., is located in the states of Wyoming and Colorado

Meanwhile, China's top energy firm, PetroChina Limited, paid $5.4 billion for a 50 percent stake in a quarter-million hectare gas field in western Canada .