Page last updated at 06:41 GMT, Tuesday, 13 April 2010 07:41 UK

Sinopec invests $4.65bn in Canadian oil project

tar sands
The rising oil price has sparked investment in Canada's tar sands

China's Sinopec oil company is to pay ConocoPhillips $4.65bn (£3bn) for a stake in a Canadian tar sands projects.

The acquisition of the 9% stake in Syncrude Canada is one of China's largest investments in North America.

Chinese firms have been scouring the globe for investments in energy assets to feed the country's booming economy.

Last year, Sinopec's paid $7.2bn for Addax Petroleum, a company with oil assets in West Africa and Iraqi Kurdistan.

Syncrude, the largest project in Canada's tar sands industry, pumps an estimated 350,000 barrels a day, about 13% of Canada's overall oil output.

Tar sands projects, in which oil is extracted from bitumen deposits, require big investments in technology.

But the rising oil price has made such investments more economically viable. Tar sands make up the largest crude oil deposits outside the Middle East.

Analysts said that the price paid by Sinopec for the Conoco stake was about $2bn more than was expected. "It just shows that the Chinese are a different kind of buyer," said Phil Skolnick, an analyst with Genuity Capital Markets.

US-based Conoco said in a statement that the sale still needed Canadian regulatory approval. The company had announced a programme of asset sales to raise about $10bn.

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