China’s Petrochemical Corp., also known as the Sinopec Group, has agreed to buy Canadian oil and gas explorer Daylight Energy Ltd. for $2.1 billion.
The Sinopec purchase is only the latest of recent Chinese investments in Canada’s booming energy industry. Two months ago China National Offshore Oil Corporation (CNOOC), China's dominant offshore oil producer, agreed to acquire bankrupt oil producer Calgary, Alberta-based company OPTI Canada Inc. for $2.1 billion. Last year Sinopec Group paid ConocoPhillips $4.65 billion for a 9.03 percent share stake in Canada’s Syncrude oil fields.
Daylight Energy Ltd. chief executive Anthony Lambert commented that the Sinopec Group offer "recognizes the highly attractive asset portfolio and exceptional terms we have assembled at Daylight," The Shanghai Daily reported.
In 2010 Daylight Energy Ltd.'s proven and probable reserves rose 46 percent to 174 million barrels of oil, 70 percent of which is natural gas.
The Sinopec Group-Daylight Energy Ltd. deal, which has been approved by Daylight's board, must still be approved by Daylight shareholders and the Chinese and Canadian governments.
Daylight Energy Ltd. went public on the Toronto Stock exchange in 2004. The Sinopec Group purchase will give the company the right to explore and develop 30,000 acres of Canadian oil and natural gas concessions.
By. Joao Peixe, Deputy Editor OilPrice.com
Joao is a writer for Oilprice.com