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think control from a variety of nations, which may include India in the future and even countries from the Middle East, which have their own significant energy production. For example, TAQA North Ltd., a division of the Abu Dhabi National Energy Company, PJSC, has significant Canadian natural gas investments, and Kuwait Petroleum Corporation is reported to be in negotiations with Athabasca Oil Corporation to get involved in its Hangingstone and Birch oilsands projects. Stringham says the government’s limits on foreign investment in the Canadian energy industry are not as restrictive as they might appear, pointing to the lack of restrictions on joint ventures and on investments outside of the oilsands. For instance, PETRONAS will likely have majority ownership of a future liquified natural gas export terminal in British Columbia, and there were no limits announced on other energy investments, such as Canadian shale oil and gas. “China is investing, along with 28 countries across the world,” says Stringham. “Canada is rich in resources, not just in the oilsands, but in oil and gas in general. It is also seen as politically safe and predictable.” Chris Cox, senior analyst of exploration and production and oilsands with Calgary-based brokerage and investment research firm AltaCorp Capital Inc., isn’t quite as sanguine as Houlden and Stringham about the impact the restrictions on oilsands investment will have on the industry. He says some smaller, less capitalized oilsands players may now find it more difficult to attract investors, since the SOEs might have been logical places to turn to for capital investment in projects and an eventual takeover. SOEs will now be interested only in joint ventures with well-capitalized, long-term partners. Just as the 2006 decision by Finance Minister Jim Flaherty to limit the growth of income trusts eliminated buyers for the assets of junior oil and gas assets and companies, the foreign investment limitation may remove SOEs as possible investors in some oilsands assets and companies. Cox says most Canadian oilsands producers are well capitalized and aren’t likely to sell many assets or to be open to majority ownership, suggesting the decision to leave joint ventures open to SOEs was influenced by the dynamics of the industry as much as by politics. In any case, it’s not likely global privately owned players like Exxon Mobil Corporation (which owns a majority stake in Imperial Oil Limited), Royal Dutch Shell plc (which has major oilsands investments) and other privately owned majors are going to abandon the oilsands anytime soon. “An estimated 84 per cent of global oil reserves are held by state-owned oil and gas companies,” he says. “Of the remaining 16 per cent, 60 per cent is in the Canadian oilsands. For that reason, there will still be interest in the Canadian oilsands.”
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