UPDATE 1-Canada clears Sinopec to buy Syncrude stake

Fri Jun 25, 2010 12:56pm EDT

* Sinopec's move is a benefit to Canada, minister says

* To pay $4.65 billion for stake in oil sands project

WINNIPEG, Manitoba, June 25 (Reuters) - Canada's industry minister said on Friday he cleared China's Sinopec Corp (600028.SS) to buy ConocoPhillips' (COP.N) stake in the Syncrude Canada Ltd oil sands project.

The deal, worth $4.65 billion, is the richest yet for Chinese companies looking for a toehold in the oil sands.

China has made a series of investments in the past year into the northern Alberta oil sands, the largest oil reserve outside the Middle East, as the world's third-largest economy seeks to lock up energy reserves to power its booming growth.

"I have approved the application by Sinopec ... to acquire control of the ConocoPhillips Partnership because I am satisfied that the investment is likely to be of net benefit to Canada," Industry Minister Tony Clement said in a statement.

Sinopec, China's second-largest oil producer and top refiner, agreed in April to buy ConocoPhillips' 9.03 percent interest in Syncrude -- the largest oil sands project -- with seven other partners controlling the rest. Canadian ownership of Syncrude remains at nearly 56 percent.

ConocoPhillips' shares on the New York Stock Exchange were down 0.5 percent on Friday

(Reporting by Rod Nickel; Editing by Frank McGurty)

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