China's state-owned oil group, Sinopec, has just paid Origin Energy's coal seam gas partner, Conoco Phillips, $US4.65 billion ($5 billion) for a 9 per cent stake in Syncrude, the world's largest producer of synthetic crude oil from the Athabasca Oil Sands in Alberta, western Canada. And the Chinese company has paid a very big price.
It beats the high end of an estimate by Macquarie Bank's resources analysis unit by about $US650 million, and values Syncrude's total reserves of 7 billion barrels of oil equivalent at $US10.33 a barrel.
Exxon Mobil is currently valued at $US4.33 a barrel by the sharemarket and Syncrude's 36.7 per cent listed shareholder, the Canadian Oil Sands Trust, was trading at $US5.61 a barrel before the deal.
The deal is relevant to any company here that owns commodities that China wants, including Macarthur, because it reinforces the fact that China is now the price-setter.
Comment..
The Athabasca Oil Sands project is a project to get Synthetic Oil from Bitumen rich sands. It has been called Messy and Greenhouse gas intensive, requiring large quantities of Natural Gas & Water to extract the Oil. So also Costly.
Just shows that he Chinese are looking ahead.
Looks like theyre doing very well with the AOE CSG deal.
AOE Price at posting:
$5.11 Sentiment: Hold Disclosure: Held
