PetroChina taps into Canada's energy resources
Oil producer will pay HK$9.3 billion for a share of shale site and will help fund its development
PetroChina has agreed to pay Encana C$1.18 billion (HK$9.3 billion) for a 49.9 per cent stake in an Alberta, Canada, shale formation as Asia's biggest oil producer steps up acquisitions of overseas energy assets.
PetroChina would also pay C$1 billion over four years to fund development of the project, Encana said yesterday.
The accord follows PetroChina's agreement this week to pay US$1.63 billion for a stake in the Browse liquefied natural gas venture in Australia.
The two deals more than double PetroChina's spending on overseas assets this year, and come less than a week after Canada approved the US$15.1 billion takeover of Nexen by rival CNOOC. The state-owned company wants half its oil and gas output to come from overseas by the end of the decade.
"It seems obvious that they were waiting for the government approval for Nexen so they could get clarification of the rules surrounding state-owned ownership," said Eric Nuttall, a portfolio manager who oversees C$100 million at Sprott Asset Management in Toronto.
The deal is the first between Canada and a state-owned company since Canadian Prime Minister Stephen Harper unveiled new foreign investment rules on December 7.
The rules, announced after the approval of CNOOC's purchase of Nexen, prohibit state-owned enterprises from taking control of Canadian oil-sands businesses unless there are "exceptional circumstances".