Canada says it needs foreign capital to develop its oil

Tue Sep 4, 2012 4:51pm EDT
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TORONTO (Reuters) - Canada does not have enough money to develop its oil resources and move oil to market, and therefore welcomes foreign capital, Natural Resources Minister Joe Oliver said on Tuesday.

Oliver was answering a reporter's question about a $15.1 billion bid by China's CNOOC Ltd to buy Canadian oil producer Nexen Inc, and the possibility of state-owned Kuwait Petroleum Corp doing a joint venture in Canada's oil sands with Athabasca Oil Corp.

"I don't want to talk about that specific proposal because it will also be reviewed by the ministry, however we know that we have a need for an immense amount of capital to build the infrastructure necessary to develop the resources and move the resources to the market," he said. "We don't have enough capital in this country and so we are welcoming capital from the outside."

Resource investment in Canada could be worth some C$650 billion ($658.9 billion) over the next 10 years, representing over 600 projects that are planned or underway, Oliver said in a speech at an investment bank in Toronto's financial district.

"Those numbers are just the beginning," he added. "Countries in the Asia-Pacific region are hungry for energy and minerals and metals and forest products they need to fuel growth and build a better quality of life for their citizens."

Financial markets are closely monitoring remarks by ministers as the Canadian government decides whether to allow the CNOOC takeover bid to go through. There is at least some opposition to the idea within cabinet.

Canada has the third largest oil reserves in the world and the government is eager to tap new markets, including those in China, for its crude products. Essentially all oil currently exported by Canada goes to the United States.

In answer to another question, Oliver said reciprocity would be one of a number of things that government will look at in determining whether the CNOOC deal would be of net benefit to Canada.

Prime Minister Stephen Harper and Finance Minister Jim Flaherty, when asked about the bid for Nexen, also have alluded to reciprocity, the idea that Beijing must also be open to Canadian investment in China.   Continued...

Minister of Natural Resources Joe Oliver speaks during Question Period in the House of Commons on Parliament Hill in Ottawa June 4, 2012. REUTERS/Blair Gable