“PetroChina Co. (857) agreed to pay Encana Corp. (ECA) C$1.18 billion ($1.2 billion) for a 49.9 percent stake in an Alberta shale formation as Asia’s biggest oil producer steps up acquisitions of overseas oil and gas assets.
PetroChina will also pay C$1 billion over four years to fund development of the project, Encana said in a statement yesterday. The accord follows Beijing-based PetroChina’s agreement this week to pay $1.63 billion for a stake in the Browse liquefied natural gas venture in Australia.
The two deals more than double PetroChina’s spending on overseas assets this year, and come less than a week afterCanada approved the $15.1 billion takeover of Nexen Inc. (NXY)by rival Cnooc Ltd. (883) The state-owned company wants half its oil and gas output to come from overseas by the end of the decade.
“It seems obvious that they were waiting for the government approval for Nexen so they could get clarification of the rules surrounding state-owned ownership,” Eric Nuttall, a portfolio manager who oversees C$100 million at Sprott Asset Management LP in Toronto, said in a phone interview.
The deal marks the first between Canada and a state-owned company since Canadian Prime Minister Stephen Harper unveiled new foreign investment rules on Dec. 7. The rules, announced after the approval of Cnooc’s purchase of Nexen, prohibit state- owned enterprises from taking control of Canadian oil-sands businesses unless there are “exceptional circumstances.” Joint ventures and minority stake acquisitions aren’t barred under the rules.”
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