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Chinese Energy Companies in Canada

PetroChina Canada

PetroChina Canada opened its doors in 2010 as Dover Operating Corporation, a joint venture between PetroChina and Athabasca Oil Corporation. Dover was focused on two oilsands operations in the region of Fort McMurray, Alberta.

After amalgamating with Phoenix Energy Holdings, the company now holds a portfolio of six assets in Alberta and British Columbia. The portfolio includes integrated oil and gas assets across the value chain. The company was renamed as Brion Energy in 2013.

In September 2017, the company was renamed PetroChina Canada.

Project Descriptions

MacKay River Oilsands
  • Wholly owned and operated by PetroChina Canada
  • Approximately 30 km west of Fort McMurray, AB
  • Projected lifespan: 1.7 billion barrels of bitumen resources
  • Ultimate production: 150,000 barrels/day
  • Phase 1 capacity: 35,000 barrels/day production, 2016
  • Steam-assisted gravity draining (SAGD) facility
  • First steam achieved: 2016
  • First oil to market: Q3 2017
  • Costs averaged $43.31/barrel
Dover Oilsands
  • Wholly owned and operated by PetroChina Canada
  • Approximately 95 km northwest of Fort McMurray, AB
  • Projected lifespan: 3.4 billion barrels of bitumen resource
  • Ultimate expected production: 250,000 barrels/day of bitumen
Grand Rapids Pipeline
  • Non-operated joint venture (50% interest) with TransCanada Corporation
  • Late 2012: Joint venture agreement signed
  • Will transport crude oil and diluent volumes 460 km between Fort McMurray region and the Edmonton/Heartland region
  • Expected dual system capacity: 900,000 barrels/day of oil and 330,000 barrels/day of diluent oil
Duvernay Shale Gas
  • Non-operational venture (49.9% interest) with Encana Corporation
  • Located in west-central Alberta
  • Liquid-rich gas and condensate resource play, >1,000 horizontal well inventory
  • Producing +20,000 BOE/day, net, 2017
Groundbirch Tight Gas
  • Non-operated joint venture (20% interest) with Shell Canada Limited
  • Montney tight gas formation, approximately 50 km of Fort St. John, British Columbia
  • Producing methane gas, natural gas liquids and condensate; 10,000 BOE/day, net
LNG Canada
  • Non-operated joint venture (20% interest) with Shell Canada Limited (50%), Korea Gas Corporation (15%) and Mitsubishi Corporation (15%)
  • A proposed natural gas liquefaction plant and marine terminal export facility near Kitimat, British Columbia on Canada’s West Coast
  • Located near Kitimat, British Columbia on Canada’s west coast
  • Phase 1: two trains for total of 13 million tons per annum with option to expand to four trains
  • Regulatory approvals: received 40-yr. export license and environmental permits
  • Final investment decision deferred in July 2016

Recent News and Executive Commentaries

Since 2016, over 30 employees have left the company’s offices in Calgary and Houston, including senior management in the crude oil, finance, and natural gas departments.

Mark Jensen, spokesman for PetroChina International America, said that the company is committed to business in the Americas. He previously said the company and its subsidiaries have restructured the organization where necessary over the last several months, and that the departures do not represent a change in strategy in the region.

The firm has gotten rid of individual bonuses and is now using a team bonus plan across Canada, the United States and China, according to two of the sources spoken to by Reuters.

Sinopec Canada

Sinopec Canada is a diversified oil and natural gas company, focused on exploiting its land base in Alberta and northeast British Columbia. Sinopec Canada acquired 40% interest of Northern Lights oil sands project in 2005 and the company has a balanced mix of crude oil, liquids-rich natural gas and resource play natural gas and is a 9.03% partner in the Syncrude Oilsands Joint Venture.

Project Descriptions

Syncrude
  • 9.03% joint venture participation in the Syncrude Oilsands project near Fort McMurray, AB
  • Current production capacity is around 350,000 barrels/day
  • Cumulative production exceeds 2.4 billion barrels up to 2017Q1
  • Proved reserve of 2.7 billion barrels of synthetic oil
Pacific NorthWest LNG Project
  • Sinopec Canada owns a 10% interest in the fully integrated Parcific NorthWest LNG Project
  • North Montney upstream natural gas assets in NE British Columbia will feed the natural gas liquefaction and export facility in the Prince Rupert region on the west coast of British Columbia
  • Cancelled by lead backer Petronas
Wapiti
  • A large contiguous land position of over 150,000 net acres in the liquids rich fairway of the Montney resource play in the Grand Prairie region of NW Alberta.
  • A large inventory of locations planned for decades of development in the area
West Central, Alberta
  • The majority are non-operated natural gas assets with multiple stacked pay intervals within the Cretaceous
  • Continue to be developed through horizontal wells with multi-stage fracture stimulations
Pembina
  • A balanced mix of oil and liquids rich natural gas assets within the Pembina area
  • A large asset base consisting of over 300,000 net acres of P&NG rights prospective for oil projects in the Cardium and Belly River formations along with liquids rich gas from the Mannville and Rock Creek.

Recent News and Executive Commentaries

Sinopec Canada (“Sinopec” or the “Company”) has engaged Sayer Energy Advisors to assist it with the sale of several of its non-core properties in various areas of western Canada (the “Properties”).  The Properties are producing approximately 664 boe/d (2.72 MMcf/d of natural gas and 210 barrels of oil and natural gas liquids per day) net to Sinopec in 2016.

CNOOC Ltd.

In 2005, the Company acquired part of shares of MEG Energy (TSX: MEG) in Canada. In August 2010, MEG’s shares started trading on the Toronto Stock Exchange in Canada, resulting in considerable appreciation of the value of the Company’s shares in MEG.

In 2011, the Company completed the acquisition of OPTI Canada Inc. (“OPTI”), an oil sands producer in Canada. The major assets of OPTI includes a 35% working interest in Long Lake and interests in three other oil sands projects located in the Athabasca region of northeastern Alberta.

In July 2012, CNOOC announced its acquisition of Nexen Inc with $15.1 billion. The transaction included proved oil & gas reserves of 1 billion barrels with 60% of it from oilsands. The takeover closed on Feb 25, 2013, and Nexen said in a statement that its shareholders would receive $27.50 in cash for each Nexen share. The acquisition gave CNOOC new offshore production in the North Sea, the Gulf of Mexico and offshore Western Africa.

In Canada, the company, through its subsidiary, Nexen, owns a 100% working interest in the oil sands project located at the Long Lake as well as three other oil sands leases in the Athabasca region in northeastern Alberta. The company also holds a 7.23% interest in the Syncrude project and a 25% interest in several other non-operated exploration and development leases.

Asset Descriptions

Long Lake Project
  • Net production averaged approximately 21,000 BOE/day in 2016.
  • Ultimate expected daily production: 72,000 BOE/day of bitumen
  • Projected lifespan: 195 million barrels of bitumen resources

Recent News and Executive Commentaries

China’s CNOOC Ltd. has cancelled a liquefied natural gas project planned for northwest British Columbia.

The goal had been to build an LNG terminal on provincial Crown land on Digby Island, located less than four kilometres away from Prince Rupert Airport. But CNOOC, through its Calgary-based Nexen unit, and its partners announced on Thursday that they have decided to scrap Aurora LNG.

 

References

  1. https://www.petrochinacanada.com/
  2. http://www.petrochina.com.cn/
  3. http://www.sinopecgroup.com/group/
  4. http://www.cnooc.com.cn/
  5. https://beta.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/chinas-cnooc-cancels-aurora-lng-project-in-bc/article36259169/?ref=http://www.theglobeandmail.com&
  6. http://www.cbc.ca/news/business/china-oilsands-alberta-oilsands-investment-1.3545401
  7. http://www.nexencnoocltd.com/en/AboutUs/MediaCentre/WhatsNew.aspx
  8. www.sinopecdaylight.com
  9. https://www.reuters.com/article/us-petrochina-oil-trading/north-american-exodus-at-petrochina-sparks-speculation-of-company-shift-idUSKCN1B22MW
  10. http://m.jiemian.com/article/1164128.html
  11. http://www.wenxuecity.com/news/2017/08/23/6514887.html
  12. http://resources.ceri.ca/PDF/Pubs/Studies/Study_163_Full_Report.pdf
  13. https://www.albertacanada.com/files/albertacanada/AOSID_QuarterlyUpdate_Winter2017.pdf
  14. https://www.reuters.com/article/us-canada-oilsands-technology-insight/innovators-toil-to-revive-canada-oil-sands-as-majors-exit-idUSKBN19A0FQ
  15. http://www.oilsandsmagazine.com/projects/brion-energy-mackay-river
  16. http://www.hydrocarbons-technology.com/projects/mackay-river-commercial-oil-sands-project-alberta/
  17. http://finance.china.com.cn/stock/ssgs/20130214/1283127.shtml
  18. http://companies.caixin.com/2014-07-16/100704996.html
  19. http://qk.laicar.com/Home/Content/283540

Related Reading for Oil Sands

EnergyGlobal Oil Supply and Inventory Primer · Chinese Energy Companies in Canada · Oil and Gas Demand · Trends in Oil & Gas · Oil & Gas/Energy Investment Banking · Investment Banking and Finance in Calgary · Macroeconomic Drivers of the Price of Oil on the Supply Side · Common Oil and Gas Investment Banking Interview Questions · Natural Gas Supply and Demand Primer · What Are: Crude Oil & Natural Gas ·
Stanley
Stanley
Stanley is currently enrolled in the MSc Finance degree at the SFU Beedie School of Business, specializing in risk management. He graduated from the University of Alberta, where he studied Petroleum Engineering. Outside of class, he works as a Canadian equity analyst in the SIAS Endowment Fund. Stanley was the Vancouver regional champion for the PRMIA case competition in April 2017.
https://www.linkedin.com/in/stanley-zhang-6b7262b7/

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