Chinese companies are looking closely at buying Canadian oil sands assets
Chinese companies eye Canadian oil sands assets
By Kevin Morrison in London
Published: February 7 2005 02:00 | Last updated: February 7 2005 02:00
Chinese companies are looking closely at buying Canadian oil sands assets, but are waiting for Canadian authorities to give the go-ahead for the first oil export terminal to ship oil to Asia before committing to new investments.
Enbridge, a Canadian pipeline operator, says it is close to concluding an agreement to build a pipeline from Alberta to the west coast of Canada to export crude extracted from the country's bitumen oil sands to Asia, in particular China.
However, John Lau, chief executive officer of Husky Energy, dismisses the idea that the Chinese might buy his company, which is 72 per cent owned by Li Ka-shing, Asia's richest man.
"We are a C$17bn (US$14.2bn) company, we are too big for them to buy right now, but who knows, in the future they may be able to afford to buy big companies," he said.
Rick Sandhal, vice-president of market development and acquisitions at Enbridge, said there was a strong case for Canadian oil sands producers to build export markets to reduce dependence on its sole export buyer, the US.
Canada exports more than half its 3m barrels a day of production to its southern neighbour, and a third of these exports come from oil sands projects, mainly in the Athabasca basin in Alberta.
In the next 10 years expansion of oil production from Canadian oil sands projects is expected to lead to production levels of 400,000 to 700,000 b/d above demand projections from the US and the local market, Mr Sandhal said. "There will be a lot of crude that has to find a home," he added.
Although Mr Sandhal was reluctant to name Chinese companies, he acknowledged that Sinopec and PetroChina were interested in the C$2.5bn pipeline project, of which Enbridge intends to keep majority control.
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