Oil Report

China's CNPC to invest in Canada oil sands - paper

BEIJING, June 29 (Reuters) - China’s top state-run energy group, China National Petroleum Corp. (CNPC), has won exploration rights to oil sand fields in western Canada and will take a majority stake in the project, a local newspaper reported on Friday.

CNPC’s new oil sands venture in Canada’s Alberta province comprises 11 fields with a total area of 258.6 square kilometres (100 sq miles), the Shanghai Securities News said, quoting a company official.

The report did not specify what percentage equity CNPC would hold or the potential reserves of the 11 fields.

CNPC, the parent of PetroChina 0857.HKPTR.N, could not be reached for comment.

CNPC is the third Chinese state-owned energy firm, after Sinopec Group and China National Offshore Oil Corp. (CNOOC), to invest in Canada’s oil sands projects. China is undergoing a national drive to diversify and secure energy supplies to fuel the country’s booming economy.

Canada ranks second in proven crude reserves after Saudi Arabia, according to Alberta’s government. Most of those resources are in Alberta’s oil sands which contain more than 174 billion barrels.

Unlike conventional oil, oil sands are deposits of bitumen, a heavy, viscous oil that must be converted into an upgraded crude oil before refineries can use it to make gasoline and other fuels.

While conventional crude oil flows naturally from reservoirs or is pumped out, oil sands are mined or recovered “in situ” by injecting steam into the ground.