Edmonton Journal
China's global energy conglomerate has made its first independent foray into Alberta by scooping up 258.6 square kilometres of oilsands leases.
China National Petroleum Corp. quietly bought the properties at provincial mineral rights auctions last winter, CNPC external relations director Zhang Xin disclosed Thursday.
The leases contain nearly two billion barrels of bitumen, Xin estimated at a Canada-China economic co-operation conference in Edmonton.
In a brief interview, Xin described the oilsands venture as a demonstration of interest in a new field with a modest commitment by CNPC standards. The state energy giant has 1.2 million employees and produces oil in 26 countries.
"This is a very small project," Xin said. CNPC has not yet made development plans or set any target dates for beginning production, he added.
"There is a long way to go," he added. Next steps will be further study of oilsands technology and regulatory requirements for projects including environmental rules, Xin said.
The properties are 11 oilsands leases bought at a January sale, he reported. Locations and prices were not disclosed.
CNPC's own name does not appear on government lists of mineral rights buyers and the province was not aware of the Chinese purchase, but the disclosure aroused no official surprise or concern.
Alberta mineral rights leases are routinely sold to anonymous buyers working through land agents sworn to secrecy.
"It's an open market," Alberta Energy spokesman Jason Chance said. "We're open for business. Mineral rights go to the highest bidder."
"Our concern is what is done with the property," added Alberta Energy spokesman Brad McManus.
Buyers of mineral rights must eventually start exploration and development activity, obeying regulations every step of the way, McManus said.
While other Chinese enterprises have acquired oilsands toeholds, all have taken the form of minority partnerships in projects led by Canadian companies.
CNPC will work on oilsands development in partnership with Alberta and Canada, Xin said. A pattern of co-operation has been established by technical and educational exchanges with the province dating back to 1989, he emphasized.
gjaremko@thejournal.canwest.com