EnCana, the Canadian energy company, and ConocoPhillips, the US oil major, on Thursday struck a deal to invest $10.7bn in a new joint venture formed to ratchet up the exploitation of Canada’s vast oil sands.

The deal is the result of EnCana’s year-long search for a partner to provide it with the refining capacity it needs to turn its heavy oil into gasoline and other products for the US market.