Encana on Thursday sold a stake in its Duvernay oil field in Canada’s Alberta province to Phoenix Duvernay Gas, a subsidiary of Chinese state-owned PetroChina for Can$2.18 billion.
Phoenix will gain a non-controlling 49.9 percent interest in the 445,000 acres field believed to hold nine billion barrels of oil, leaving Encana with a 50.1 percent stake and control of the operation.
The joint venture partners are expected to invest Can$4 billion in new drilling and processing facilities over the next four years, doubling the pace of developing the oil field.
Encana has already drilled nine wells into Duvernay, has five producing wells and two rigs actively drilling additional wells.
“The Duvernay project will combine Phoenix’s integrated upstream and downstream capabilities and financial resources with Encana’s proven resource play hub expertise,” Phoenix president Zhiming Li said in a statement.
The deal comes days after Ottawa approved two major takeovers of Canadian energy firms by the the Chinese state-owned giant CNOOC and Malaysia’s national oil company Petronas — deals estimated to be worth more than US$20 billion in total.
Regulatory approval for CNOOC’s takeover of oil and gas company Nexen, and Petronas’ offer for gas producer Progress Energy Resources, however, came with a warning.
Ottawa said it would henceforth block attempts by foreign state-owned companies to buy controlling stakes in Canada’s lucrative oil sands.
In October, Phoenix Energy joined with Canadian firm TransCanada to build a $3 billion pipeline in Alberta.
Encana sells stake in oil field to PetroChina subsidiary
