TORONTO (Reuters) - Limits on foreign purchases in Canada’s oil sands do not seem to be causing a drop in investment in the sector, Canada’s Natural Resources Minister Joe Oliver said on Friday.
Oliver, visiting China by way of South Korea, said he discussed the new rules with Chinese officials.
“I had no indication from anybody that the decline had anything to do with those rules,” he said on a call with reporters. “I can’t preclude that possibility, but I have no indication that that’s the case.”
Canada’s Conservative government last year allowed Chinese firm CNOOC Ltd (0883.HK) to buy energy company Nexen, but said in future, state-owned enterprises would be permitted to acquire controlling stakes in the oil sands only in exceptional circumstances.
Many bankers and industry experts read this as a veiled warning that Chinese state-owned enterprises, which are among the most acquisitive companies in the sector, ought to steer clear of making any further plays for oil sands assets in the western Canadian province of Alberta.
Former Conservative Industry Minister Jim Prentice, now vice chairman of the Canadian Imperial Bank of Commerce, recently noted that investment in Canada’s energy sector had plunged, and he laid part of the blame on the new rules, which he said were deterring foreign companies.
Canadian officials have said they welcome minority stakes or joint ventures by state-owned enterprises in the oil sands.
Oliver said one Chinese official had told him there is often a quiet period after a big acquisition, and he noted that growth in China has slowed somewhat.
“I would say that they wish the was rule wasn’t there, but there is no confusion about it,” he said.
Reporting by Allison Martell; Additional reporting by Euan Rocha; Editing by Chizu Nomiyama