OPTI Canada, Oilsands Producer, Sold To China's CNOOC For $2.1-Billion

Oil Sands

First Posted: 07/20/11 08:26 AM ET Updated: 09/19/11 06:12 AM ET

THE CANADIAN PRESS -- CALGARY - Chinese oil company CNOOC Ltd. is making a major thrust into the Canadian oilsands business by agreeing to purchase struggling Calgary-based oilsands producer Opti Canada Inc. (TSX:OPC) for $2.1 billion.

The announcement early Wednesday comes a week after Opti Canada filed for a court-supervised restructuring designed to transfer ownership of the oilsands developer to creditors.

Opti has been undergoing a strategic review for well over a year, in the hopes a corporate or asset sale would help it address its debt troubles.

Under terms of the agreement, CNOOC Ltd. (China National Offshore Oil Corp.) will pay $1.179 billion to lenders who hold Opti's second lien notes and assume $825-million of first lien notes.

The Chinese company will also pay $37.5 million to backstop parties and $34 million to shareholders.

CNOOC Ltd. is China's largest producer of offshore crude oil and natural gas and one of the largest independent oil and gas exploration and production companies in the world.

It has a 35 per cent stake in the Long Lake oilsands project, which is operated by Nexen Inc. (TSX:NXY), one of Canada's largest oil and gas producers.

The Opti board of directors has voted unanimously in favour of the transaction with CNOOC, saying it is in the best interest of the company.

"CNOOC Ltd. is a technically experienced and well-capitalized company that is equipped to support further development at Long Lake and future expansions in the Canadian oil sands," said Opti president and CEO Chris Slubicki in a statement.

Yang Hua, the CEO of CNOOC, said the transaction strengthens his company's Canadian presence in the oilsands business.

"We believe that upside potential of the assets will facilitate local energy supply and our production growth in the long term."

The sale is expected to close in the fourth quarter of 2011, pending regulatory approvals in Canada and China.

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THE CANADIAN PRESS -- CALGARY - Chinese oil company CNOOC Ltd. is making a major thrust into the Canadian oilsands business by agreeing to purchase struggling Calgary-based oilsands producer Opti Cana...
THE CANADIAN PRESS -- CALGARY - Chinese oil company CNOOC Ltd. is making a major thrust into the Canadian oilsands business by agreeing to purchase struggling Calgary-based oilsands producer Opti Cana...
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07:13 AM on 08/22/2011
The Chinese are very smart to invest their money for the long term. US DOD estimates are that they will be economically and militarily our equals, if not our superiors, sometime between 2030 and 2050.
Genders
Love, Tolerance, Enlightenment
09:16 PM on 08/19/2011
Time to stop the pipe line from there, huh?
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kori77
03:12 PM on 07/20/2011
There have been a lot of reports lately of the growing economic partnership between China and Canada. This might seem like good news for Canada, and maybe it is in the short term it is, in the long term however, everyone better watch out at how China handles its industrialization. If it continues to industrialize like the west with our linear, mechanistic and reductionist approach, we are all in for a real treat. Check out this video http://www.youtube.com/watch?v=xu1t5CtcbEU Wake up people you can't run a linear, infinite growth economy on a finite planet. As Herman Daly said “There is something fundamentally wrong in treating the Earth as if it were a business in liquidation. The economy is a wholly owned subsidiary of the environment, not the reverse.”
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Adrian31
60% of the time, it works everytime...
02:32 PM on 07/20/2011
And here we go again...the Chinese will not stop until they own everything. This is a small taste of the times to come. We better brush up on our Mandarin.
10:17 PM on 07/20/2011
So when Chinese don't buy your stuff you say they taxed your stuff too much, when they buy your products and you say they want everything.
According to your logic they are evil for doing anything? right?
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DAE
11:16 PM on 07/20/2011
Its called "damned if you do damned if you don't." Same thing with technology. We say that we have an advantage over China building high value goods, but then won't export them to China because of the supposed security risk.
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Adrian31
60% of the time, it works everytime...
06:05 PM on 07/21/2011
The Chinese are free to buy "stuff". They shouldn't be allowed to buy off every COMPANY!
Clearly you failed to understand what I meant - not surprising considering I have no clue what you were trying to say.
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Norma Ward
01:15 PM on 07/20/2011
China is looking to secure its supply of energy by investing in oil producing countries around the world. During the month of November 2010, for the first time, China's oil consumption rose above 10 million barrels of oil per day (BOPD) reaching a high of 10.2 million BOPD up 15 percent on a year-over-year basis.



Here is a look at what the IEA expects world oil production and consumption will look like in the year 2035 as Asia becomes a larger part of the consumption side of the ledger:



http://viableopposition.blogspot.com/2011/04/macroeconomics-of-oil-supply-and-demand.html
Genders
Love, Tolerance, Enlightenment
09:19 PM on 08/19/2011
Just as we do, but so far, without the oil wars.

China will figure it out sooner than the USA, that green energy is cheaper. safe, clean and forever. rooftop solar, offshore wind and waste bio char bio fuels. All of which the Chinese are pursuing with vigor.
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Willow207
01:06 PM on 07/20/2011
Canada's economic future lies somewhere between
the US and China, in the rush for "Black Gold"
Sure hope Canada's leaders remember who that gold belongs to!
The resources of a sovereign nation belong to that nation--
to be used and sold at a fair market value, for the benefit of that nation...
in an environment which is free of bullying, threats, intimidation, lies and cheating!
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Malcolm Hensley
Last of the Reagan Republicans
09:01 PM on 07/20/2011
are you for the pipeline to the Gulf or against it?
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Willow207
12:41 AM on 07/21/2011
And your question relates to China and US rush for Canada's oil and natural gas how?
Genders
Love, Tolerance, Enlightenment
09:19 PM on 08/19/2011
totally against, now....
10:24 PM on 07/20/2011
When China raises their long-time undervalued rare earth price , you say they are against the WTO, and when it comes to Canada you day 'The resources of a sovereign nation belong to that nation--
to be used and sold at a fair market value, for the benefit of that nation...'
Isn't it hypocritical
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Willow207
12:41 AM on 07/21/2011
You can take that up with the Queen of England. who grants the government of Canada the right to lease and regulate the use of natural resources.
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Malcolm Hensley
Last of the Reagan Republicans
11:22 AM on 07/20/2011
Now the U.S. will have to build the pipeline to the Gulf so the Chinese can get their oil!

It's OK to have the Canadians mad at us but not the Chinese.
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gravescanada
07:40 AM on 07/20/2011
Once again, Canada is selling itself to the highest bidder. CNOOC Group is a state-owned oil company, fully owned by the Government of the People's Republic of China, and the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) performs the rights and obligations of shareholder on behalf of the government. Thats right, State Owned! So now the Nation of China, its communist government will OWN part of Canada. How is this good for us here in Canada?
08:02 AM on 07/20/2011
I have to agree with you.

I also wonder what this will do for any chance of making any environmental improvements in these operations. I don't think it bodes well.
08:21 AM on 07/20/2011
well keep voting conservative and this is what you get ... its called free enterprise capitalism.. trudeau must be turning in his grave
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sonoffestus
Got smart & got out!
01:03 PM on 07/20/2011
You are correct! Can't wait to see the deficit go through the roof, but, but Conservatives are so fically responsible, too funny.

Act II of the North American meltdown will be set in Canada. The Harper Government............ The staring role.