* Plenty of private capital available, energy minister says
* Says China accounts for under 10 pct of oil sands output
TORONTO Dec 10 New rules limiting Canadian oil
sands investments by foreign state-owned companies are unlikely
to hinder rising oil production from the region, Joe Oliver, the
minister of natural resources, said on Monday.
Oliver, speaking to reporters following a speech to an oil
and gas investment conference, said Prime Minister Stephen
Harper's decision to limit investment by state-owned companies
in the world's third-largest crude reserves would not restrict
capital available for the investment-hungry oil sands sector.
"There is a huge amount of capital available globally and
quite a bit available inside the country," he said. "In fact the
oil sands have been financed overwhelmingly by the private
"Foreign state-owned enterprises represented, I believe,
last year about 11 percent of acquisitions globally. ... We
believe there's plenty of private sector money."
Harper introduced the restrictions on Friday, as Canada
approved the $15.1 billion purchase of Nexen Inc by
China's CNOOC Ltd -- China's biggest-ever overseas
acquisition -- and the C$5.2 billion ($5.3 billion) takeover of
Progress Energy Resources Corp by Petronas,
Malaysia's state oil company.
While CNOOC will gain full control of Nexen's six-billion
barrel oil sands resource, state-owned investors in the future
will be limited to minority stakes in oil sands projects unless
there are exceptional circumstances.
Oliver said the new rules were issued to assuage concern
that state-owned enterprises would operate on strategic, rather
than commercial terms.
Such companies "may have broader objectives if the state
decides to impose its political objectives on the operation of
the state-owned enterprise," Oliver said. "Then there is an
issue and that's precisely what is potentially of concern."
However, he added that even after the Nexen acquisition is
complete, China's state-owned and controlled oil companies will
hold less than 10 percent of production from Alberta's tar
sands, the world's third-largest crude reserve and the single
largest source of U.S. oil imports.
"The percentage of Chinese-owned investment in the oil sands
in terms of future production will still be under 10 percent,"
Oliver said. "So we didn't feel with the acquisition the number
was excessive, but new rules are now in place."