Chinese state oil firm buys Canadian oil sands producer
Chinese state oil company CNOOC has agreed to buy Canadian oil sands producer OPTI for $2.1bn (£1.3bn).
The deal - which must be approved by regulators - is the latest move by state-run Chinese firms to buy stakes in North American oil producers.
Canada's Alberta province is believed to have the third-largest reserves of oil in the world.
However it is far more expensive to extract oil from Canada's oil sands than from conventional fields.
CNOOC says it will pay OPTI shareholders $34m, but will also take on the firm's $2bn worth of debt.
The firm's main asset is a 35% stake in the Long Lake oil sands project in Alberta.
OPTI says the deal will allow it to continue to invest further in the project.
"CNOOC is a technically experienced and well capitalised company," said OPTI chief executive Chris Slubicki.
End Quote Yan Hua chief executive, CNOOC
We are pleased to expand our presence in the oil sands business”
The International Energy Agency (IEA) predicts that in the next five years almost half of global oil demand growth will come from China.
Rising demand for oil and significant cash reserves have led Chinese energy firms to buy into foreign oil reserves.
"We are pleased to expand our presence in the oil sands business," said CNOOC chief executive, Yang Hua.
In 2005 the firm bought a 17% stake in Canadian oil sands firm MEG Energy. CNOOC has also obtained minority stakes in oil projects in Texas and Colorado.
CNOOC is not the only Chinese state oil firm investing in the region.
In 2009 PetroChina bought a $1.7bn share in Athabasca Oil Sands, and Last year Sinopec paid $4.6bn for a 9% share of Syncrude, Canada's largest oil sands producer.
The IEA estimates that by the end of 2010 Chinese state energy companies operated in 31 nations and held shares in oil firms in 20 of those countries.Environmental concerns
Environmentalists have criticised extracting oil from sand and clay which leads to higher carbon emissions than conventional production.
Such concerns may affect demand for crude from oil sands in the US and Europe where new environmental regulations are planned.
California recently announced new low-carbon fuel standards and plans for a new pipeline from Alberta to Texas have been delayed.
Most oil from Alberta is currently exported to the US.
However a second proposed pipeline would take oil to Canada's pacific coast making it easier to export to China instead.