PetroChina has agreed to spend C$1.9 billion (HK$13.43 billion) for a majority stake in two Canadian oil sands projects as the mainland, which must feed its booming economy, hedges against the risk that conventional oil will be harder and more expensive to find. The mainland's largest oil and gas producers have been busy buying up overseas assets to help enhance the nation's energy security, especially as oil prices have been cut in half since July last year. PetroChina has signed agreements to acquire a 60 per cent interest in Alberta-based Athabasca Oil Sands' MacKay River and Dover oil sands projects, said Athabasca Oil Sands. They are in the centre of the Athabasca region in northeastern Alberta of western Canada. The region is the largest of three oil sands deposits in the province. Together, they are estimated to have oil sands, or crude bitumen, a thick tar-like form of petroleum, equivalent to 179 billion barrels of crude oil. Canada ranks behind just Saudi Arabia in proven oil reserves, according to Athabasca Oil Sands. The MacKay River and Dover projects are estimated to contain five billion barrels of 'best case' bitumen resource, it said. A PetroChina spokesman said the project was attractive because Canada's investment environment is relatively stable compared with many oil-rich regions, and this was a strategic and long-term move. 'Conventional oil supply is getting more and more difficult to find,' he said. 'Given the mid- to long-term demand and supply outlook, we have decided on the move.' However, despite its abundance, oil sands is expensive to extract and refine into usable form and is only lucrative if conventional crude oil prices stay between US$45 and US$85 a barrel, said Mirrae Assets Securities head of regional energy research Gordon Kwan. This compared with a hurdle of US$20 to US$40 in most normal oil projects. 'This is China's biggest gamble on the long-term commerciality of Canada's oil sands,' said Kwan. It is not the first time mainland energy producers have invested in oil sands. PetroChina's parent, China National Petroleum Corp, reportedly won a licence in mid-2007 to mine oil sands in Alberta in an area estimated to have bitumen resources of close to two billion barrels of oil. CNOOC, China's dominant offshore oil producer, spent C$150 million in 2005 on a 16.69 per cent stake in MEG Energy, an Alberta oil sand project developer. In the same year, China Petrochemical bought 40 per cent of the Northern Lights oil sand project in Alberta for C$105 million. But following the rebound in oil prices this year, interest appeared to have returned. China Petrochemical bought an additional 10 per cent stake in Northern Light in early April from French partner Total, even though it had yet to fix a production start-up time for the project.