- The Washington Times - Monday, April 13, 2009

CALGARY, ALBERTA (AP) - French oil giant Total SA raised its bid Monday for Canadian oil sands company UTS Energy Corp. by about 35 percent after its first offer was rejected.

Total said Monday it had raised its offer to 829.8 million Canadian dollars ($676 million) from its January bid of about 616 million Canadian dollars.

UTS stock has since risen well above the initial bid of 1.30 Canadian dollars per share and is now trading at about 1.80 Canadian dollars on the Toronto Stock Exchange.

Its latest bid is 1.75 Canadian dollars per share ($1.43).

The rise in UTS shares has come as oil prices have risen and a deal was struck to combine Suncor and Petro-Canada.

Petro-Canada is the operator of the Fort Hills oils sands project in which UTS has a 20 percent stake. The oil sands field has an estimated 4 billion barrels of bitumen, a tar-like substance that is extracted using mining techniques.

Alberta’s once-booming oil sands sector has cooled as every major company has scrapped or delayed some expansion plans as the price of oil has dropped from almost $150 to around $50.

Alberta is home to vast reserves of oil sands. Industry officials estimate the region could yield as much as 175 billion barrels of oil, which would make Canada second only to Saudi Arabia in crude oil reserves.

However, the cost of getting the oil out of the sand is prohibitive. Analysts say oil needs to be at $80 for new oil sands projects to be viable.

The massive oil sands projects have also been criticized as a growing source of greenhouse gas emissions.

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