Canadian energy stocks rose after a C$5.8 billion ($5.46 billion) deal to buy Western Oil Sands Inc. underscored the appeal of oil reserves in the nation.

Suncor Energy Inc., Petro-Canada and other energy companies also gained after crude oil closed at a record high. Nortel Networks Corp. led the decline by technology shares after Alcatel-Lucent posted a bigger loss than analysts estimated.

U.S. oil companies Exxon Mobil Corp. and ConocoPhillips may consider takeovers in Canada given the nation's stability when compared with Venezuela, Iran and Nigeria, said John Kinsey, who helps manage $900 million at Caldwell Securities Ltd. in Toronto.

``Canadian oil companies certainly are hot,'' said Kinsey. ``There's a large geopolitical premium in oil that won't go away any time soon. Companies like Exxon and Conoco that have been kicked out of Venezuela would look at Canada.''

The Standard & Poor's/TSX Composite Index rose 3.91, or less than 0.1 percent, to 13,868.63 in Toronto. The benchmark gained as much as 1.2 percent during the day. Its rally from the steepest weekly loss since September 2001 also fizzled out in the afternoon on concerns that losses from subprime mortgages in the U.S. are mounting.

Energy shares in the S&P/TSX gained 1.5 percent, the most among 10 industries in the index.

Western Oil Sands shares surged the most since September 2001, gaining C$3.19, or 9.4 percent, to C$37.32. Owners of Calgary-based Western will get C$3.8 billion in cash and C$2 billion of Marathon Oil Corp. stock, the Houston-based buyer said today in a statement. Shareholders also will get stock in a new company that will own Western's assets in Kurdistan, which aren't included in the sale.

Suncor, Petro-Canada

Suncor added C$1.68, or 1.8 percent, to C$96.45. The second- largest oil-sands producer said today that it plans to spend C$4.4 billion to expand its northern Alberta mining operations and increase production.

Petro-Canada, which plans to spend C$26.2 billion developing its Fort Hills oil-sands project, rose 98 cents to C$58.19.

Smaller energy companies with oil-sands projects jumped. Shares of Opti Canada Inc., a junior partner in Nexen Inc.'s Long Lake tar-sands project, gained C$1.28, or 5.9 percent, to C$23. Petrobank Energy & Resources Ltd., which has developed an alternative technology for extracting bitumen from the oil-sands, jumped C$2.79, or 10 percent, to C$29.85.

The oil sands, located about 750 kilometers (466 miles) north of Calgary, contain 175 billion barrels of recoverable oil, behind only Saudi Arabia's 259 billion barrels, according to the Canadian Association of Petroleum Producers.

Venezuela, Nigeria, Iran

Exxon Mobil and ConocoPhillips quit their oil-sands projects in Venezuela after the government seized the ventures on May 1 as part of a plan to nationalize assets. Oil production in Nigeria, Africa's biggest producer, fell in the first quarter on unrest in the Niger Delta. Shipments from Iran, the fourth-largest producer, may be disrupted by sanctions intended to curb the nation's nuclear program.

Crude oil gained 1.8 percent to close at a record $78.21 a barrel in New York on speculation demand will outpace supply as refiners increase fuel production. Futures touched $78.28, the highest intraday price since reaching a record $78.40 a barrel on July 14, 2006.

The gauge of technology shares in the S&P/TSX lost 2.4 percent, while phone stocks retreated 1.7 percent.

Nortel dropped 81 cents, or 3.4 percent, to C$23.15. North America's biggest phone-gear maker fell after rival Alcatel- Lucent reported a second-quarter loss that was twice as much as analysts estimated. Nortel is scheduled to report quarterly results on Aug. 2.

`Irresponsible'

Rogers Communications Inc. fell C$2.84 to C$48.22. Canada's largest provider of wireless services reported a second-quarter loss because of costs tied to employee stock options.

Shares of Shaw Communications Inc. dropped 88 cents to C$25.30. Speculation that Rogers Communications will merge with Shaw, Canada's second-largest cable company, is ``irresponsible,'' Rogers Chief Executive Officer Ted Rogers said. Newspapers including the National Post last week reported that Rogers may be considering a deal with Shaw.

Research In Motion Ltd., maker of BlackBerry e-mail phones, slipped C$6.28 to C$229.

The following shares had unusual price changes.

Saputo Inc. (SAP CN) rose C$2.11, or 4.3 percent, to C$51.10. Canada's biggest cheesemaker reported a bigger first- quarter profit increase than analysts estimated after the company raised prices and cut costs.

Sun Life Financial Inc. (SLF CN) rose C$1.34, or 2.7 percent, to C$50.39, the most since August. The first Canadian insurer to report quarterly earnings said profit rose 15 percent to a record, topping analysts' estimates, as higher stock prices lifted asset-management fees.

Timminco Ltd. (TIM CN) rose 40 cents, or 7.1 percent, to C$6. The maker of engineered specialty metals parts said that AMG Advanced Metallurgical Group NV (AMG NA), its majority shareholder, increased its stake to 50.6 percent from 50.1 percent. The stock has risen 20-fold this year.

Canadian Natural Resources Ltd. (CNQ CN)
Nortel Networks Corp. (NT CN)
Opti Canada Inc. (OPC CN)
Petrobank Energy & Resources Ltd. (PBG CN)
Petro-Canada (PCA CN)
Research In Motion Ltd. (RIM CN)
Rogers Communications Inc. (RCI/B CN)
Shaw Communications Inc. (SJR/B CN)
Suncor Energy Inc. (SU CN)
Western Oil Sands Inc. (WTO CN)