PetroChina has agreed to buy a 60% stake in two planned Canadian oil sands projects for $1.7bn (£1bn).
The firm, which is Asia's largest oil company, is buying the holdings in the MacKay River and Dover fields from Canadian firm Athabasca Oil Sands.
The two fields hold about five billion barrels of oil, and Canada's government is expected to back the deal.
Canada's Alberta oil sands hold the world's second-largest crude reserves, but the cost of extraction is high.
This is because the process of separating the oil from the sand is both energy and labour intensive, and as such it has only been cost effective when global oil prices have been high.
Analysts say world oil prices need to be above $80 a barrel for the Canadian oil sands to be viable.
Oil is currently trading at about $70 a barrel after hitting highs of $147 last summer, and a low of near $30 at the start of this year.
"The Canadian government is looking for investment and injections of capital," said William Lacey, an analyst at FirstEnergy Capital.
"I don't see why this wouldn't be viewed as a positive."
Canada's oil sands are estimated to hold a total 173 billion barrels of oil, the world's second-largest reserves behind Saudi Arabia.