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Eni's New Energy Sandbox

Countries whose names begin with "C" may save us all in the years ahead. With crude prices setting new records almost daily, Canada's rising oil sands production has helped push the Great White North even further into the lead as the largest oil exporter to the U.S. Now Italy's Eni (NYSE: E  ) has uncovered a potentially meaningful oil sands find in another "C" country -- Africa's Republic of Congo.

The Congo project is located in multiple areas totaling nearly 1,800 square kilometers. Following an agreement signed with the Congo's government, Eni will invest roughly $3 billion over a four-year period for project development.

The investment will grant Eni 20% ownership in a company that will own several facilities in the area, with the government taking the remaining share. Along with beginning development of the sands, Eni will build a natural-gas-fired power plant capable of producing about 450 megawatts of power. It appears that by next year, the facility will be able to meet about 80% of the country's power requirements.

Eni, along with such other big oil companies as Chevron (NYSE: CVX  ) and Royal Dutch Shell (NYSE: RDS-A  ) (NYSE: RDS-B  ) failed to replace production with new discoveries in 2007. For every 10 barrels Eni produced, it added only about nine back to its reserve base.

Frankly, Fools, I wouldn't base purchases in Eni on its new Republic of Congo activities. For starters, copper producer Freeport-McMoRan  has watched its costs escalate significantly as it's endeavored to develop its Tenke Fungurume mining concessions in the area.

Furthermore, if you're interested in playing in the sand from an investment perspective, why not dig via companies like BP (NYSE: BP  ) or ConocoPhillips (NYSE: COP  ) , which are active in Canada, or perhaps Canadian Natural Resources (NYSE: CNQ  ) ? The Alberta sands may hold as many as 173 billion barrels, their development is infinitely further along, and Canada's political climate is most likely far more stable than most of Africa's.

Further petro-powered Foolishness:

Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned. He does welcome your questions, comments, or kibitzing. The Fool's disclosure policy knows the lyrics to "O Canada."

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