Another of China’s oil majors is set to acquire 49.9% of a Canadian shale gas company.
China’s largest energy firm, PetroChina, has agreed to pay Encana Corp C$2.2 billion ($2.2 billion) for a 49.9% non-controlling stake in the company. The multi-billion dollar acquisition will not be subject to the same governmental scrutiny as the recent $15.1 billion CNOOC-Nexen deal and is inline with Ottawa’s foreign policy, according to Encana officials.
Unlike CNOOC’s takeover of Nexen and Petronas’ acquisition of Progress Energy Resources, which involved acquiring the entire companies, the investment does not give the state-owned PetroChina control over the firm, and therefore does not pose a threat to national security.
The purchase was the Chinese oil giant’s second in the space of one week, after it acquired an 8.33% stake in Woodside Petroleum Ltd’s proposed LNG project from BHP Billiton for $1.63 billion.
Despite an apparently categorical statement from Canadian Prime Minister, Stephen Harper, that the Nexen and Petronas deals would be the last involving overseas investors, the CNOOC acquisition will send out a positive message to Chinese energy firms.
Sinopec’s vice president of International Petroluem Exploration and Production, Hou Hongbin, believes Canada hasn’t “closed the door” to state-owned enterprises. “We can still work by the joint-venture model or some other kind”, adds Hou, who still sees the nation’s rich oil sands as ripe for Chinese investment.