Canadian oil company buying rival

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Suncor Energy has agreed to buy its Canadian compatriot Petro-Canada for 19.12bn Canadian dollars ($15.5bn; £10.6bn) in an all-share deal.

The deal, which still requires the approval of both sets of shareholders, will create Canada's largest oil firm.

Both companies are among the largest operators in Canada's oil sands industry, where crude is removed from the surface earth in northern Alberta.

The merger comes after oil prices have fallen back from last year's highs.

'Canadian response'

Suncor and Petro-Canada said in a statement that joining together would help them save about CA$300m in costs per year.

"It's a made-in-Canada response to the challenges presented by global market uncertainty today," said Ron Brenneman, president and chief executive of Petro-Canada.

US light crude was trading around $53 a barrel on Monday. Last July it hit a record high of $147.

Prices have fallen back since the global economy fell into recession.

While oil industry analysts say the Canadian oil sands could contain the world's second largest crude reserves after Saudi Arabia, it is expensive to process.