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Associated Press: Marathon Oil to buy Western Oil for $5.5B

Associated Press – July 31, 2007 10:25 AM ET

HOUSTON (AP) – Marathon Oil has agreed to buy Western Oil Sands for $5.5 billion in cash and stock.

The deal announced today would give Houston-based Marathon a stake in Canada’s oil sands market.

As part of the deal, Western is required to spin off WesternZagros, its wholly-owned subsidiary with interests in Kurdistan.

The closing is expected in the fourth quarter of this year.

Marathon says the agreement will give it a 20% interest in the Athabasca Oil Sands Project in Alberta — currently held by Western Oil.

Shell Canada and Chevron Canada hold the remaining 60% and 20% stake, respectively.

Canada’s western region is home to vast reserves of sands rich in oil, bitumen-tar or other thick petrochemicals.

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