SinoCanada Completes Oil Sands Acquisition and Partnership with Synenco

On May 30, 2005, Sinopec International Petroleum xploration and Production Corp., through its subsidiary SinoCanada Petroleum Corp., entered into a series of agreements under which Sinopec paid approximately $105 million in return for a 40 per cent interest in the Northern Lights oil sands project located in Northeastern Alberta.

Under the terms of the agreements, Sinopec paid Synenco $38 million cash for an approximate 14.5 per cent interest in the Northern Lights project’s assets. Synenco then contributed its remaining interest in the project’s assets to the Northern Lights Partnership (NLP) in return for a 60 per cent interest in NLP. Sinopec contributed its 14.5 per cent interest plus approxi-mately $111.7 million cash to NLP in return for a 40 per cent interest in NLP. Synenco will be the operator of the project and the managing partner of NLP. The project is an integrated oil sands mining, bitumen extraction and upgrading project, located northeast of Fort McMurray, Alberta, with design capacity of over 100,000 barrels per day of synthetic crude oil. Total project costs to be incurred over a five-year period are currently estimated at $4.5 billion.

Sinopec was represented by Blake, Cassels & Graydon LLP with a team led by Craig Spurn and Gerry Deyell that included Kent Chicilo and Jodi Mason (corporate - oil & gas), Paul Jeffrey (regulatory) and Edward Rowe (tax) in Calgary, Brian Facey and Ben Little (competition and foreign investment) in Toronto, Cliff Sosnow (regulatory) in Ottawa, Wei Shao (corporate) in Vancouver, and Robert Kwauk and Anna Chen (corporate) in Beijing.

Synenco was represented by Bennett Jones LLP with a team led by Don Greenfield (energy) and Bob Lehodey, Q.C., (corporate and securities) that included Michael Callihoo and Michelle Waritsky (energy), Andrew Lamb (competition), Chris Skelton (lending), Brad Gilmour (regulatory) and Mark Powell and Lisa Ricketts (corporate and securities).