China's oil giant is to acquire Canadian oil sands developer for $2.1 billion
China National Offshore Oil Corporation Ltd (CNOOC) has said that its subsidiary, CNOOC Luxembourg, has entered into an agreement to acquire OPTI Canada for $2.1bn. The transaction is expected to be completed by the end of the fourth quarter this year, government and regulatory approvals permitting.
Through the deal, CNOOC will get 35% of the troubled Long Lake oil sands project in Alberta, which has been falling short of production targets and struggling with liquidity issues since its late 2008 startup. Calagry-based OPTI filed for a court-supervised restructuring last week, and has already lost 90% of its value in the past year.
Nonetheless, CNOOC are optimistic and expect the operation to have throughput rates of approximately 72,000 barrels-per-day of bitumen at full production, with the upgrader expected to produce 58,500 bpd of sweet crude at full capacity. Current production levels, however, were well below in the last quarter at an average of only 27,900 bpd.
OPTI president and CEO Chris Slubicki is confident in CNOOCs ability to manage future expansions in the oil sands, citing their superior technical skills and substantial financing.
The deal supports the recently reported trend of China investing heavily in Canada's massive oil sands to bolster its global sources of hydrocarbon supplies.