Alberta back foreign oil deals9/14/2012
Alberta Premier Alison Redford voiced pointed support for foreign investment during a trade mission in China, just as Ottawa is reviewing the merits of China’s ambitious bid to acquire Canada’s Nexen Inc.
Ms. Redford and other Canadian leaders assembled Thursday in Beijing with senior Chinese government and business officials, who made the case for the $15.1-billion (U.S.) deal to serve as a catalyst for greater economic ties between the nations.
The Alberta Premier, meanwhile, said the province is open to investment.
“We have always believed foreign investment assisted us with growing our economy so we are encouraging that. We want to make sure it is done for the benefit of Alberta,” Ms. Redford said in an interview in Beijing. “We believe these transactions are the best for our economy.”
She noted her team met with Chinese state-controlled CNOOC Ltd. before the Nexen deal was announced to talk investment, research, and development.
Ms. Redford’s comments are a signal that Alberta will likely welcome CNOOC’s deal with Nexen as long as it can demonstrate clear benefits, a view that may be aligned with Ottawa.
Speaking in Beijing, China’s Minister of Commerce Chen Deming took the unusual step for a Chinese official of commenting on the Nexen deal, appealing for “Canadian colleagues and friends” to consider Chinese investments with a “reasonable” view. “I believe these transactions will follow market rules because they are market transactions.”
Mr. Chen spoke before an audience of nearly 400 political and trade delegates, while Ms. Redford and outgoing Enbridge Inc. CEO Pat Daniel sat at a front-and-centre table with CNOOC CEO Li Fanrong.
China’s message for Canada: approve CNOOC’s $15.1-billion friendly bid for Nexen, get export oil pipelines to the West Coast going, and riches will follow.
The Alberta government, meanwhile, wants Canadians to support investment from abroad in order to ensure the province’s continued prosperity on the back of the oil sands.
Noting currently modest trade levels between Canada and China, Mr. Chen said the countries “have a huge amount of potential to be tapped.”
CNOOC’s Mr. Li specifically addressed his company’s ambitions in Canada, and hinted that approval of the Nexen deal will lead to a stronger relationship between the two countries.
“Our investment … is good for Alberta, good for Calgary, good for Canada as a whole,” he said in an interview.
“We want to become qualified local citizens, part of Canadian society,” Mr. Li continued. “Once we do our job, it will become a bridge for Canada-China’s long-term co-operation.”
The CNOOC-Nexen transaction has prompted some Canadians to call for China to reciprocate, opening its doors wider for Canadian investment. Also at issue is whether Canada can strike a balance between this lucrative market and ceding sovereign control of its natural resources, which are in growing demand with Chinese state-owned enterprises. All three of China’s government-controlled energy companies have invested in the oil sands.
Gordon Houlden, director of the University of Alberta’s China Institute, was in the audience for Mr. Chen’s speech and believes the official was trying woo Canadians with the prospect of more trade.
“I see it as a carrot,” he said of Mr. Chen’s speech. Further, he thinks Mr. Chen’s emphasis on the CNOOC-Nexen deal being a “market” transaction was made because China anticipates that being a sticking point for Ottawa and he is trying to reinforce the argument that China is playing by the West’s rules.
Nine of Canada’s 13 premiers have been on a major trade mission in China this week, promoting oil, natural gas, minerals, agricultural products, schools and tourism destinations to a China seemingly hungry for all of these things.
(Globe and Mail)