According to Bloomberg News, China Petroleum & Chemical Corp. (SNP), mainland’s second-largest oil producer and top refiner, plans to buy ConocoPhillips’s (COP) 9.03% stake in oil-sands producer Syncrude Canada Ltd. in a deal that may be worth as much as $4.65 billion.
An announcement of the purchase by the Beijing-based company may come as soon as today, a person familiar with the matter told Bloomberg.
The report comes after spending by Chinese co.’s on mining and energy acquisitions reportedly reached a record $32 billion last year.
Bloomberg: “China is moving more and more and more toward wanting to and having a desire to secure natural resources,” said Robbert Van Batenburg, head of equity research at Louis Capital Markets LP in New York. “For them to get a greenfield operation in the oil sands in Canada is going to be much more difficult, so this is probably the most viable.”
The oil sands contain the largest crude deposits outside the Middle East. Syncrude, which is located north of Fort McMurray in northern Alberta, has currently a capacity of about 350,000 barrels per day.
Syncrude is considered the world’s largest producer of synthetic crude oil from oil sands.