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THE WALL STREET JOURNAL: India, China Win On Venture's Bid For Syria Oil Stake: "...about half of Syria's total oil output, are operated by Syria's state-owned Syria Petroleum Co., with Royal Dutch Shell PLC also holding interests.": Wednesday 21 December 2005

By TAMSIN CARLISLE
Staff Reporter of THE WALL STREET JOURNAL
December 21, 2005; Page C4

CALGARY, Alberta -- A joint venture between the flagship state oil companies of India and China has emerged as the winning bidder for Petro-Canada's oil-producing assets in Syria, chalking up a successful conclusion to an initial effort by Beijing and Delhi to cooperate over securing energy supplies to power the booming economies of the world's two most populous nations.

Petro-Canada said it agreed to sell for 484 million ($581.2 million) its minority stakes, ranging from about 33.3% to 38%, in a number of mature Syrian oil and natural-gas properties to an entity jointly owned by India's Oil & Natural Gas Corp. and China National Petroleum Corp. The Calgary, Alberta, integrated oil company said its share of production from the properties is equivalent to about 58,000 barrels of oil a day. The company said its share of the assets had combined proven reserves equivalent to about 66 million barrels of oil at Dec. 31, 2004.

China and India have shown intense rivalry in their respective drives to supplement stagnating domestic oil and gas production with overseas assets, frequently bidding against each other and helping to drive up the price of oil and gas fields throughout the world. It is unclear from the outcome of the Syrian auction whether the two will continue to cooperate. Commenting on the proposed transaction, India's petroleum secretary S.C. Tripathi said the joint-venture company outbid seven other parties interested in acquiring the Syrian properties.

The transaction is retroactive to July 1, 2005, and is expected to close early in 2006, subject to Syrian government approval. Petro-Canada said the properties, which account for about half of Syria's total oil output, are operated by Syria's state-owned Syria Petroleum Co., with Royal Dutch Shell PLC also holding interests.

Despite Syria's proximity to Iraq, Petro-Canada doesn't intend to exit the country, but will continue to explore for oil and gas there in the hope of discovering large untapped fields, the company's president and chief executive, Ron Brenneman, said in a conference call. Best-known as Canada's former national oil company, Petro-Canada has overseas operations in a number of other parts of the world, including the North Sea, North Africa and Trinidad.

Write to Tamsin Carlisle at tamsin.carlisle@wsj.com

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