PARIS -- French oil giant Total SA said Wednesday it will offer $505 million in cash for Calgary-based UTS Energy Corp. in a deal to gain access to the company's stake in a large oil sands project in northern Alberta.

Paris-based Total said its per share offer for all outstanding shares of UTS Energy would be launched "in the coming days" and would run for "at least 60 days."

The deal is conditional on Total receiving at least 66.67 percent of UTS Energy's shares.

UTS Energy owns a 20 percent stake in Alberta's Fort Hills Project, an oil sands field with an estimated 4 billion barrels of bitumen.

Alberta is home to vast reserves of oil sands, a tar-like bitumen that is extracted using mining techniques. 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 massive oil sands projects have been criticized as a growing source of greenhouse gas emissions.

In its own statement Wednesday, UTS Energy said it is "reviewing the unsolicited take-over proposal" and "will pursue the course of action that is in the best interests of UTS and its shareholders."

The Forest Hills Project is led by Petro-Canada with a 60 percent stake. The remaining 20 percent is owned by Canadian mining company Teck Cominco Ltd.

A final decision on developing the Forest Hills Project is expected to be made by 2010, with production starting as early as 2013, Total said.

The project will strengthen Total's oil sands portfolio in northern Alberta, where it already owns majority stakes in two other developments -- the Joslyn Project and the Northern Lights Project.

Besides Forest Hills, UTS Energy also holds a 50 percent working interest in an additional 306,667 acres of oil sands prospective leases located primarily on the west side of the Athabasca River, UTS Energy said. SUBHEAD: The French company will offer $505 million for Canada's UTS Energy Corp.

Originally published by GREG KELLER Associated Press.

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