(Photo : Yanchang Petroleum)

Shaanxi Yanchang Petroleum Group, a Chinese conglomerate that engages in exploring, producing, transporting, and selling of petroleum and natural gas, said it ready to pay $219.37 million to acquire Canada's oil and gas company Novus Energy.

Like Us on Facebook

The Hong Kong listed Chinese company said the acquisition, if approved by authorities, will further deepen its global presence as it continues to look for investment opportunities around the world.

The acquisition will give Yanchang, China's fourth-largest oil exploration firm, access to the oil and gas assets of Novus that are located in Canada's Saskatchewan and Alberta. It will be the biggest purchase by a Chinese company of an oil and gas firm in Canada since the China National Offshore Oil Corporation (CNOOC) acquired Nexen Inc.

Acquisition To Boost Yanchang's Global Assets

The Novus assets, which produced a total of 3,057 million barrels for the first half of this year, will further boost Yanchang's assets abroad. The company currently owns two oil assets in the African country of Madagascar.

Novus said the deal will be completed through a plan of arrangement under Alberta's Business Corporation Act. A new entity, Yanchang Canada, has been formed for the purpose of completing all the agreements and arragements of the acquisition.

Meeting Local Energy Demands

China has been showing interest in Canada's oil and gas industry as well as in oil and gas assets around the world. Last February, state-run energy giant CNOOC acquired Canada's Nexen Inc. for $15 billion and the country continues to seek for energy investments around the world in order to meet the growing domestic demand for energy.

Meanwhile, Russian-based natural-gas extractor Gazprom found its stock going up 6% after it signed a new contract to sell gas to mainland China. The deal follows years of negotiations and analysts believe that Gazprom could at least be assured that the new deal is legally binding, with the selling price not related to extremely low wholesale gas prices in the United States.