PetroChina buys control of MacKay River oil sands

PetroChina, one of China’s state-owned oil companies and Asia's largest, will take full control of the MacKay River oil sands project after Athabasca Oil Sands announced Tuesday it had sold the remaining 40 per cent of the development for US$673 million. Athabasca had previously sold PetroChina a 60 per cent stake in the oil sands projects. PetroChina becomes the first Chinese state-owned company to wholly own an oil sands development in Canada.

The first phase of the MacKay River project is expected to produce 35,000 barrels per day, eventually expanding to 150,000 barrels. Construction will begin next month with a start-up date set for 2014. Dover Operating Corp. will operate the project on PetroChina's behalf. A spokesman for Dover was quoted in the National Post as saying that the company's strategy is to develop itself as a Canadian company staffed primarily by "Canadian experts."

Chinese oil companies PetroChina, China Petroleum & Chemical Corp., known as Sinopec, and Cnooc Ltd. have all invested heavily in Canada's oil patch. Sinopec currently has a 9 per cent stake in Syncrude, the largest of Canada’s oil sands projects.

With the uncertainty surrounding future oil sands-derived crude oil exports to the United States, Canada is increasingly looking to China to sell its oil. For their part, the Chinese have urged the Canadian government to approve Enbridge’s $5.5 billion Northern Gateway pipeline to the west coast so that Alberta oil can be shipped to China.  Public hearings on the pipeline, which are expected to be lengthy and contentious, begin next week. The project faces a great deal of opposition from native communities, who have vowed to block it at all costs, and environmental groups.