OREANDA-NEWS. January 04, 2012. PetroChina — the first Chinese national oil company to win 100 per cent ownership of a northern Alberta oilsands project — may seek a new partner to help develop it, an executive said.

 But Zhiming Li, president of PetroChina subsidiary Cretaceous Oilsands Holding Ltd., also told the Herald the company has the capability to develop the 150,000-barrel-per-day MacKay River project on its own.

 On Tuesday, Calgary-based Athabasca Oil Sands Corp. said it had triggered an option to sell its 40 per cent interest in the MacKay River project to partner PetroChina for USD 680 million, minus repayment of loans totalling USD 474 million as of Dec. 31.

 While Chinese national companies have stakes in several oilsands projects, it would be the first to be entirely owned by one if the deal closes as expected in two or three months.

 “PetroChina has been working on this project for almost two years,” said Li. “It believes MacKay River is a project with high-quality bitumen reservoirs. We will accept this deal, no problem.”

 He added the New York Stock Exchange-traded arm of state-owned China National Petroleum Corp., one of the largest energy companies in the world, will take over Dover Operating Corp., the joint venture operating arm, and will retain the expertise of its 90 employees, most of whom are Canadians, to build the project.

 The first 35,000-bpd phase is to start construction this month and be operational by 2014.

 “Our head office is considering standards of how to select a partner,” said Li in response to a question. “I guess that’s one of the options.”

 When Athabasca sold 60 per cent stakes in MacKay River and the larger 250,000-bpd Dover projects to PetroChina for USD 1.9 billion in 2009, the agreement included options for either party to trigger the sale of the rest to PetroChina within 30 days of final regulatory approval.

 MacKay River got final approval on Dec. 23.

 Athabasca president and chief executive Sveinung Svarte said the MacKay deal is good for both parties.

 “I think this is what you call a perfect divorce because PetroChina has ambitious growth plans for Canada and they’re very happy to get these additional barrels, whereas we are pleased as well to take the proceeds and develop (Athabasca’s) 100 per cent assets faster.”

 At an estimated cost of USD 43,000 per flowing barrel, MacKay River could cost USD 6.5 billion to develop.

 Both Svarte and Li said it’s too early to say if a similar put/call option on the Dover project will be put in place when it receives regulatory approval, likely in late 2012. That option would cost PetroChina USD 1.32 billion.

 Meanwhile, Li said PetroChina is looking for more deals, but only big deals.

 “PetroChina is a very big company, looking for opportunities worldwide,” he said. “Of course, oilsands are a major target so the answer is yes, we are looking at other possibilities.

 “In terms of numbers, it should be a big number. It should not be just 35,000 barrels (per day). It should be bigger than that. Much bigger.”

 Li confirmed PetroChina has 11 northern Alberta oilsands leases it has held for several years and is “evaluating” the resource before coming up with a plan for them.

 Just before Christmas, in the first outright Chinese takeover of a conventional western Canadian oil and gas producer, state-owned Sinopec finalized its USD 2.2-billion buyout of Daylight Energy Ltd. of Calgary.

 On Tuesday, Sinopec announced it will spend USD 2.2 billion on stakes in U.S. shale properties owned by Devon Energy Corp. — a company that also has thermal oilsands operations in Alberta.

 Wenran Jiang, a senior fellow at the Asia-Pacific Foundation of Canada and a University of Alberta associate professor of political science, said his contacts in China indicate that the national oil companies are increasingly more interested in conventional resources than oilsands but they will buy both if the price is right.

 On the Toronto Stock Exchange, Athabasca shares closed at USD 12.61, up 12 cents, on Tuesday. In New York, PetroChina gained USD 7.07 to close at USD 131.38.

 Several of the financial analysts who cover Athabasca had assumed the put/call would be exercised.

 CIBC World Markets analyst Andrew Potter said in a note Tuesday that the deal was a “slight positive” for Athabasca and could accelerate development of its other assets, notably its west-central Alberta Deep Basin conventional light oil plays.

 Canaccord Genuity analyst Phil Skolnick agreed and noted that Athabasca has sufficient tax pools to shield the estimated USD 90 million resulting tax burden of the MacKay River deal.

 Svarte said the PetroChina deal requires federal Competition Bureau endorsement, expected to be easily won as it there is no risk of it cornering the oilsands market. He said the original agreement passed Investment Canada muster in 2009 and won’t require further review.

 Athabasca has seconded 27 employees to the operating company and those staff will be returned, Svarte said. PetroChina has eight secondees and the rest are employed directly and will remain after the deal is done.

 Last month, Athabasca announced a USD 1-billion 2012 capital budget, of which USD 403 million was aimed at its wholly owned oilsands prospects and an identical USD 403 million at its light oil prospects.

 The rest, earmarked for the joint venture, will now be reduced by about USD 190 million, it said.

 A little over USD 10 million will remain in the budget for the Dover project.