China Invests. How the rising superpower eating up western energy companies.
As Ottawa mulls approval of the communist country’s largest foreign investment to date — the $15.1-billion bid from state-controlled CNOOC Ltd. to purchase Calgary-based Nexen Inc., which was approved by shareholders last week — Canada-based experts on China argue the country infamous for replicating the innovations of others has a newfound respect for intellectual property rights. A Canadian energy executive with years of experience dealing with a Chinese state-owned enterprise, meanwhile, continues to sing the praises of the rising Asian superpower.
“When we closed the joint venture with PetroChina, we went into it with the expectation that they would be a very good partner to work with,” said Sveinung Svarte, chief executive of Athabasca Oil Corp. “They have not disappointed.”
The Calgary-based mid-cap oil and gas producer first agreed to sell a 60% interest in its MacKay River and Dover oil sands projects to the Chinese state-owned company in 2009 for $1.9-billion. In January, PetroChina paid another $680-million for complete ownership of the 150,000 barrel-per-day MacKay River project.
Access to financing tends to be among the key reasons joint venture deals like that are signed. And with more than $3-trillion in foreign cash reserves, China seems an ideal source of capital for cash-strapped Canadian companies.
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