China's Cnooc closes C$2.1-bn acquisition of oil sands operator Opti Canada

China National Offshore Oil Corporation (Cnooc), yesterday closed its C$2.1-billion ($2.04 billion) acquisition of Opti Canada, allowing China's largest offshore oil producer to expand its Canadian oil sands assets.

With the acquisition, Beijing-based Cnooc will get a 35-per cent stake in the Long Lake oil sands project, which can produce 58,500 barrels of oil per day, and three other oil sands leases located in the Athabasca region of Alberta.

The Long Lake project and three other oil sands leases is joint owned by Opti and Calgary-based Nexen Inc, where Nexen is the sole operator of the Long Lake project.

In July, Cnooc offered to buy Opti for $34 million in cash and assume $2.1 billion in debt. The deal included $1.18 billion payable to holders of Opti's second lien notes, $37.5 million payable to backstop parties and the assumption of $825 million first lien notes.

The deal came just a week after Opti filed for bankruptcy protection due to the poor performance of the Long Lake project, which has been riddled with several glitches since it began operations in 2008 and has been producing well below its 72,000 barrels per day capacity.

Opti was founded in 1999 by Israeli energy company Ormat Industries, which had developed the OrCrude process in the 1990s.