PetroChina Takes Remaining 40% MacKay River Shares From Athabasca Oil

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Oil sands are expected to put Canada within the top-five largest oil producing countries across the globe by the year 2020. (Photo: Giovanni Miniato)
Oil sands are expected to put Canada within the top-five largest oil producing countries across the globe by the year 2020. (Photo: Giovanni Miniato)

BUSINESS

  • PetroChina first Chinese company to fully own a Canadian oil sands development
  • MacKay River project expected to yield nearly 35,000 barrels of oil per day by 2014
  • PetroChina also made a deal with Afghanistan to develop oil, natural gas reserves in Amu Darya 

Athabasca Oil Sands Corp. is selling off its remaining 40% stake in Canada’s MacKay River oil sands project to PetroChina, Asia's largest oil company, for the sum of nearly $680 million.

This announcement comes just two years after Athabasca sold 60% of its MacKay River shares to the same China-based oil company. The deal makes PetroChina the first Chinese company to wholly own a Canadian oil sands development.

According to Athabasca’s CEO Sveinung Svarte: "I think this is what you call a perfect divorce because PetroChina has ambitious growth plans for Canada, and they're very happy to get these additional barrels, whereas we are pleased as well to take the proceeds and develop (Athabasca's) 100% assets faster.”

It is expected that PetroChina will commence work at MacKay River this month. The company plans to produce approximately 35,000 barrels per day by 2014 at an estimated cost of $1.25 billion. The ultimate output from this oil sands development could reach 150,000 barrels per day.

PetroChina Partners with Afghanistan Government

On the opposite end of the map, PetroChina also entered a deal with Afghanistan’s government to develop the country’s oil and natural gas reserves in the Amu Darya basin.

This project is expected to yield approximately $7 billion.

In a statement to BusinessWeek, Afghan Mines Minister Wahidullah Shahrani indicated that “the contract will include exploration and extraction, and the government will get 70% of the profit from selling each barrel of oil.”

Key Statistics – Oil Sands Reserves

  • By 2015, Environment Canada anticipates that 8% of Canada’s greenhouse gas emissions will come from oil sands. To date, the organization reports that 5% of the country’s greenhouse gas emissions result from oil sands and approximately 0.1% worldwide.
  • Oil sands are expected to put Canada within the top-five largest oil producing countries across the globe by the year 2020.
  • It takes two tons of refined oil sands to produce one full barrel of oil.

By Laurie Juliano-Bachara for
Laurie Juliano-Bachara is a Chicago-based writer who covers the latest topics in professional services, entertainment and business news.

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