Murphy Oil Corp. will soon become a business partner with China’s largest oil conglomerate — if ConocoPhillips’ deal to sell its stake in Canada’s huge Syncrude oil sands project is approved.
ConocoPhillips announced Monday that it had signed definitive agreements with subsidiaries of Sinopec to sell its 9.03 percent interest in Syncrude for $4.65 billion. The deal is expected to close in the third quarter of 2010 once Canadian and Chinese government approvals are obtained, ConocoPhillips officials said.
El Dorado-based Murphy owns a 5 percent working interest in the Syncrude project, which is the world’s largest producer of crude oil from oil sands and the largest single source producer in Canada. The project combines mining, extraction and upgrading technologies to produce a light, sweet synthetic crude.
Sinopec, formally known as the China Petroleum & Chemical Corp., is the largest refiner and petrochemical producer in China. The Chinese government, which owns 75 percent of Sinopec, has recently ramped up its worldwide search for oil and natural gas reserves to fuel its rapidly growing economy.
China quietly changed its "energy independence" strategy after political pressure ended the China National Offshore Oil Corp.’s (CNOOC) attempt to buy U.S. oil giant Unocal for $18.5 billion in 2005. Since then, Sinopec and CNOOC shopping sprees have lead to China gaining interest in many of the larger oil and gas projects across the globe.
Besides Murphy Oil and Sinopec’s interest in Syncrude, the Canadian Oil Sands Trust owns the largest stake at 37 percent. The huge project produces 111.3 million barrels of oil a year, and includes five other smaller stakeholders.
Murphy Oil plans to report its first quarter earnings in early May. Wall Street expects the oil and gas sector to see higher profit margins, mainly because international crude prices are $30 a barrel higher than a year ago.