ANALYSIS-UPDATE 1-Canada's foreign limits may hit oil sands growth
* Direct state control allowed only as exceptions
* Oil sands growth plans require foreign capital
* Industry welcomes clarity, sees more joint ventures (Adds quotes)
By Jeffrey Jones
CALGARY, Alberta, Dec 9 (Reuters) - New Canadian rules limiting control of its oil sands by foreign state-owned companies may turn away some investors who now covet more than minority stakes just as the industry seeks massive amounts of capital to fuel its growth ambitions.
The oil sands in western Canada, the world's third-largest crude reserve and the source for much of the United States' oil imports, need an estimated C$120 billion ($121 billion) in investment in the next decade, according to the Alberta government.
The scale of the investment means that the industry will need to tap foreign capital.
But, in approving the contentious takeovers of Nexen Inc and Progress Energy Resources Corp by Chinese and Malaysian state-owned companies, Prime Minister Stephen Harper put a limit on potential investment.
The government said future bids for control of oil sands businesses by state-owned enterprises (SOEs) would be allowed only in exceptional circumstances. Continued...