Opti Deal Opens Doors for Chinese Unconventional Deals

China National Offshore Oil Corp., plans to spend $2.1 billion US buying Opti Canada Inc. and its Long Lake oilsands project.

The bid by China's largest offshore oil and gas producer epresents the second largest Chinese investment in Canada's oilpatch after Beijing-based refining giant Sinopec Corp. spent $4.6 billion in April 2010 on a nine per cent stake in Syncrude Canada Ltd..

Last month, a $5.4-billion joint venture between Encana Corp. and a subsidiary of China's largest oil and gas company PetroChina Co. Ltd. to develop the Calgary firm's northeastern B.C. Cutbank Ridge shale gas play fell through.

University of Alberta associate political science professor Wenran Jiang, a senior fellow at the Asia Pacific Foundation of Canada, said CNOOC's bid is evidence the failed joint venture between Encana and PetroChina is not indicative of overall Chinese sentiment about the oilpatch.

"Chinese oil and gas companies are still looking for deals," Jiang said.

CNOOC will take over Opti's 35 per cent interest in four Alberta oilsands projects - Long Lake, Kinosis, Leismer and Cottonwood, which together have proven reserves of 195 million barrels of bitumen.

Calgary-based Nexen Inc., which operates Long Lake and has a 65 per cent stake in the project - the only of Opti's assets that is producing.

Jiang said the new partnership with Nexen opens the door for future joint ventures to develop Western Canadian shale gas plays between CNOOC and the Calgary firm, which has been on the hunt for Asian investors flush with cash.