PetroChina deal likely to go ahead

CALGARY — National security concerns have put the kibosh on some of China’s past attempts to invest in the natural resources sector, but the possible benefits of PetroChina’s oilsands investment will likely be key to whether regulators approve the deal.

CALGARY — National security concerns have put the kibosh on some of China’s past attempts to invest in the natural resources sector, but the possible benefits of PetroChina’s oilsands investment will likely be key to whether regulators approve the deal.

“Certainly, in the current economic climate, people everywhere are much more welcoming of foreign investment from almost anyone than perhaps they would have been before we went into a recession,” Paul Beamish, an international business professor at the Richard Ivey School of Business, said Tuesday.

“Any time a country is in recession and someone is talking about throwing significant investment dollars in, that’s of greater interest.”

On Monday, Athabasca Oil Sands Corp. announced a joint-venture agreement with PetroChina that will see the Chinese company acquire a 60 per cent interest in two of Athabasca’s oilsands properties for $1.9 billion.

The Investment Canada Act requires a review any time a Canadian company with assets of more than $312 million is purchased. That legislation was amended this spring to include a national security test as well.

Speaking to reporters in Calgary on Tuesday, Prime Minister Stephen Harper said that Ottawa would not put up further barriers to foreign investment.

“Particularly when we’re in this period of global recession, restoration of private investment is important for the gradual recovery of the global economy, and of course by implication, the Canadian economy as well,” he said.

“Obviously this is a more controversial investment. I will just say that there are laws in place to review foreign investment transactions when they meet a certain threshold and our government has strengthened those reviews by including a clause that allows officials to examine issues of national security.”

The fact that the deal was framed as a joint-venture allays some possible concerns, said Dany Assaf, a partner with law firm Bennett Jones.

PetroChina would be buying an interest in Athabasca’s underlying assets, not Athabasca itself. The management and operations would remain unchanged.

“It seems to be structured in a way that’s quite pro-active in terms of immunizing itself from some of the most difficult questions that could be asked,” said Assaf.

To date, China’s interests in the oilsands — reserves second in size only to Saudi Arabia’s — has been limited.

Sinopec Corp. has a 50 per cent stake in the Northern Lights project 100 kilometres northeast of Fort McMurray Alta., with French energy giant Total S.A. holding the rest.

China National Petroleum Company bid on and obtained 11 oilsands leases in 2007, and in 2005 the Chinese Offshore Oil Corporation invested $150 million in Calgary-based Meg Energy.

The Athabasca deal would follow some unsuccessful attempts by Chinese companies to secure a steady flow of natural resources to support its burgeoning economy.

In 2005, China National Offshore Oil Corp. tried to take over California-based Unocal Corp., but withdrew its US$18-billion bid amid political furor in Washington over the takeover’s national security implications. Unocal instead merged with fellow U.S. energy firm Chevron Corp.

In June, a US$19.5-billion deal between Anglo-Australian miner Rio Tinto PLC and Chinese aluminum company Chinalco fell through after Australian legislators flagged national security concerns.

Just Posted

ReThink Red Deer gets thumbs up from city on pollinator barn structure

Group is hoping to get a $40,000 building grant

Team Alberta athletes arrive in Red Deer on Saturday for pre-games orientation

Excitement is building with less than a month to go, says Team Alberta spokesperson

Springbrook Skate Park gets financial boost

Province approves $125,000 grant for proposed skate park

UPDATED: STARS Lottery is back

Lacombe STARS patient tells his story

Former Red Deer man named Mr. Gay Canada

To compete in Mr. Gay World

Trudeau says politicians shouldn’t prey on Canadians’ fears

The Prime Minister was speaking at a townhall in Ontario

‘Prince of Pot’ Marc Emery accused of sexual assault, harassment

Emery denied the allegations, but a Toronto woman says she is not the only one speaking out

Asteroids are smacking Earth twice as often as before

The team counted 29 craters that were no older than 290 million years

Canada’s arrest of Huawei exec an act of ‘backstabbing,’ Chinese ambassador says

China has called Canada’s arrest of Huawei chief financial officer Meng Wanzhou ‘politically motivated’

In limbo: Leftover embryos challenge clinics, couples

Some are outright abandoned by people who quit paying storage fees and other couples struggle with tough decisions

Netflix rejects request to remove Lac-Megantic images from ‘Bird Box’

At least two shows on Netflix’s Canadian platform briefly use actual footage of the 2013 tragedy

Teen vaping is an epidemic: US government

E-cigarettes are now the top high-risk substance used by teenagers, outpacing cigarettes, alcohol, marijuana

‘I never said there was no collusion,’ Trump lawyer says

President Donald Trump’s lawyer Rudy Giuliani says he has ‘never said there was no collusion’

Body of Canadian miner found after African kidnapping

Kirk Woodman’s body was discovered 100 kilometres from the site where he worked for Progress Mineral Mining Company in Burkina Faso

Most Read