China continues its expansion in the field of natural resources
State-run energy giant PetroChina signed an agreement with Canadian firm Encana to acquire a 49.9% stake of the natural gas project (Duvernay Lands) in Alberta. For this, the Chinese company will pay $ 2.2 billion / 1.3 pounds. Encana is a leading North American energy producer that is focused on growing its strong portfolio of diverse resource plays producing natural gas, oil and natural gas liquids. According to Encana’ press release, “At closing C$1.18 billion was paid to Encana and C$1.0 billion is payable over the next four years in the form of a carry of half of Encana’s share of development capital. During this period, the joint venture partners plan to invest a total of C$4.0 billion in new drilling, completion and processing facilities. Encana estimates that the Duvernay joint venture lands contain about 9 billion barrels of oil equivalent petroleum initially-in-place. Encana remains the operator of the joint venture with its 50.1% working interest”.
This is the most recent investment company PetroChina to purchase their oil and gas resources in a bid to satisfy growing domestic demand for energy, says BBC. This is not the first and probably not the last. Remember that earlier this year, PetroChina became the owner of the entire project to exploit gas from MacKay River (in northern Alberta) after acquisition of Athabasca Oil Sands Corp. its stake to 40%, while in 2011 acquired 60 % of shares. Also, PetroChina reached Canadian shale gas assets through a deal with Royal Dutch Shell, which shows China’s underlining strategic interest in Canada, in a transaction reportedly worth more than US$ 1billion. In addition, earlier last week, PetroChina announced it will invest a significant stake in an Australian liquefied natural gas to those of BHP Billiton – $1.6bn investment in the Browse natural gas project in Western Australia, notes Financial Times. “Canada has been a magnet for Chinese energy investment thanks to its rich resources, open foreign investment climate and stable regulatory environment. Analysts say that trend is set to accelerate after the Canadian government gave its blessing last week to CNOOC’s acquisition of Nexen, a Canadian oil company with assets around the world”.