By David Ljunggren
OTTAWA Oct 10 During visits to China and South
Korea next week, a senior Canadian official will promote
investment in Canadian oil and gas firms despite strict limits
Ottawa imposed in 2012 on foreign purchases in the energy
Canada's Conservative government last year allowed Chinese
firm CNOOC Ltd to buy energy company Nexen while
making clear that foreign state-owned companies would not be
allowed in the future to buy majority stakes in energy
But, Canadian officials welcome investment by foreign
state-owned companies as long as these firms realize they can
only buy minority stakes in Canada's energy companies.
In a high-profile speech last week, a former Conservative
minister said the rules were deterring investors and noted
foreign purchases of Canadian energy firms had plunged this
Natural Resources Minister Joe Oliver will visit South Korea
and China next week and he said one of his objectives would be
to make clear Canada still welcomed foreign investment.
"We're talking here in China and Korea about very
knowledgeable shrewd investors ... but there nevertheless can be
in their reading some uncertainty or confusion about where we're
coming from and that's why it's important to talk about that,"
he said in an interview on Thursday.
Oliver's comments were a rare public acknowledgement by a
government minister that the new limits had the potential to put
Canada is keen to develop the oil sector, in part because it
wants to start exporting crude to China and other Asian nations.
"I don't wish to dismiss entirely the issue of what people
might be reading into the rules ... While we have said we're
still open for business, that has to be confirmed," he said.
Former Conservative Industry Minister Jim Prentice, now vice
chairman of the Canadian Imperial Bank of Commerce, said last
week that investment in Canada's energy sector had plunged this
year and laid part of the blame on the new rules, which he said
were deterring foreign companies.
Prentice said overall mergers and acquisitions in Canada so
far in 2013 had dropped to C$3 billion (US$2.9 billion),
compared with C$66 billion a year ago, and said investment from
Chinese state-owned enterprises had virtually ground to a halt.
Oliver, though, attributed the decline to the cyclical
nature of investing and investor sentiment.
Citing data from Price Waterhouse Cooper, he said global
mergers and acquisitions in the oil and gas sector fell from
$154.6 billion in the fourth quarter of 2012 to $46.9 billion in
the first quarter of 2013 and $45.4 billion in the second
The government is a strong supporter of the natural
resources sector and last year passed legislation making it
easier for large projects such as mines and pipelines to be
built. That move prompted protests from environmentalists.
Oliver said Canada needed C$650 billion in investment in the
natural resources sector alone over the next decade, much of
which would have to come from abroad.
Malaysia's state oil firm Petronas plans to spend
$35 billion to develop shale gas assets in Canada and build a
liquefied natural gas export terminal linking the country to
Asian markets, company officials said on Monday.
"I would call it a massive show of confidence in the
Canadian economy," said Oliver.