SHANGHAI - China National Petroleum Corp has become the first Chinese firm to control a Canadian oil sands project after winning exploration rights to the resources in Alberta, state press said Friday.

The country's largest oil producer has secured exploration rights to 11 sections with an area of 258.6 square kilometres (103.4 square miles), the Shanghai Securities News reported, citing unnamed company sources.

The deal, expected to eventually yield 220,000 barrels of crude daily, is the first case of a Chinese firm taking a controlling stake in a Canadian oil sands project, the report said, without disclosing any financial details.

In 2005, China National Offshore Oil Corp agreed to acquire a 16.69 percent stake in Canada's MEG Energy Corp, for 150 million Canadian dollars. The later owns oil sand leases in 52 sections totalling 32,800 acres in Alberta.

Sinopec, Asia's largest refiner, also agreed to pay 150 million Canadian dollars for a 40 percent stake in a joint venture producing synthetic crude from western Canada oil sands.

The Shanghai newspaper cited officials with the China National Petroleum Corp as saying that oil sands, which are more expensive to process than light crude, are viable as long as crude prices are above 30 dollars per barrel.

At an estimated 173 billion barrels, Canada's oil sands rank second behind Saudi Arabia in petroleum reserves at 230 billion barrels but they were long neglected due to high extraction costs.

Since 2000, however, soaring crude prices and improved extraction technology have persuaded several foreign companies to invest billions of dollars.