Oil and Gas Sector-Politics and Image

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

CALGARY and WASHINGTON — A torrent of oil pumped from new wells across the U.S. is setting in motion a decade of dramatic change that promises to wean the country off OPEC, and threatens the growth of energy imports from Canada.

The U.S. is now staring at an energy future awash with its own crude, with far-reaching consequences for Canada’s oil sands, the U.S. economy and global geopolitics. This massive shift has been sparked by changing political sentiment and technological advances that have allowed crude to be tapped in new places – from North Dakota to Oklahoma, Colorado, Michigan, and even Florida.

The United States, according to new data released Monday by Bentek, a U.S. energy analysis firm, will see its oil production rise nearly five million barrels a day, or 74 per cent, in the next decade.

In that time, reliance on countries outside Canada will largely disappear. The U.S. today imports 45 per cent of its petroleum, half from OPEC countries. But by 2022, Bentek projects, only a million barrels per day will be delivered to U.S. shores by tanker – down from 6.7 million in 2011 and just 5 per cent of total demand – and at least some of those won’t come from OPEC, but from countries like Mexico and Brazil.

Read more

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Calgary — Mark Carney strode in front of the most powerful members of Canada’s energy industry with a message that was sure to please: the Bank of Canada has done the math, and oil companies are not setting the country on a course of economic destruction.

In short, he said, high oil prices aren’t hurting Canada. “In a world of elevated commodity prices, it is better to have them. Bank of Canada research shows that high commodity prices, regardless of the cause, are good for Canada,” he said.

Strong crude pricing does force a rise in the loonie, he said. But the overall impact is a net rise in “income, wealth and GDP in Canada.” While the higher dollar does harm non-commodity exports, that pain is “partially offset by the fact that a stronger currency reduces the cost of productivity-enhancing machinery and equipment imports,” he said at the annual Spruce Meadows Round Table just south of Calgary, which draws business leaders from across the world.

And, Mr. Carney added, any central bank efforts to ward off so-called Dutch disease – by tampering with Canada’s currency to protect manufacturers, for example – are likely to do more harm than good.

Read more

The National Post is Canada’s second largest national paper.

Amid all the hoopla of the Democratic party convention this week and the promises of shared prosperity, there was little for Canada to take away.
 
In the party’s national platform, released to coincide with the event in Charlotte, N.C., Canada barely rates a mention and there is nothing on the most important unresolved issue between the two countries and a big pillar of Canada’s own future prosperity — the stalled Keystone XL pipeline.
 
It’s a stark contrast to the Republican plan, which has made North American energy independence with the help of a stronger partnership with Canada and Mexico a key objective, and promises approval of the controversial US$7.6-billion pipeline from Alberta’s oil sands to refineries in the U.S. Gulf “on Day One” of a Mitt Romney administration.
 
Heads up: if re-elected in the Nov. 6 vote, Barack Obama will keep Canada guessing about the fate of the controversial project, despite approving the southern leg earlier this year, continuing efforts by proponent TransCanada Corp. to improve the more controversial northern leg, and by Ottawa to lobby for its approval.

Read more

The National Post is Canada’s second largest national paper.

It’s prime time for Enbridge Inc.’s Northern Gateway and the embattled pipeline company is switching the channel.
 
After years of controversy focused on the project’s risks to the environment, its impacts on First Nations and its uneven distribution of the benefits, Enbridge appealed to the greater good in hearings in Edmonton Tuesday. It was the company’s first opportunity to defend before regulators the $6-billion “national project” from Alberta to the British Columbia coast, and it likened it to the Canadian Pacific Railway, the St. Lawrence Seaway and the TransCanada Pipeline.
 
“All attracted great attention and debate, but when constructed, laid the foundation for significant benefits for Canadians,” John Carruthers, president of Northern Gateway, said to regulators. “Our project is no different.” In an interview ahead of the hearing, Mr. Carruthers said the project is important for the company, but even more important for Canada.

“It’s critical for Canada to be part of a growing world economy and get full value for our natural resources,” he said, referring to the deep discount affecting Canadian oils because there is insufficient pipeline space to move it to the United States, its sole export market. “That is the objective of the project.

Read more

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Carol Goar’s column appears Monday, Wednesday and Friday. Carol Goar’s column appears Monday, Wednesday and Friday.

Remember Corn Cob Bob? The goofy-looking mascot for the Canadian Renewable Fuels Association — a farmer’s body with a bright yellow corn cob head — was ubiquitous a few years ago. So was his creator Kory Teneycke, executive director of the association.

They showed up farmers’ markets, fall fairs and holiday celebrations promoting ethanol. Then they started appearing at political events alongside MPs and cabinet ministers.

It was one of the most effective marketing campaigns in recent memory. By 2005, three provinces — Saskatchewan, Manitoba and Ontario — had set mandatory standards for ethanol in gasoline. In 2006, Prime Minister Stephen Harper made it national; all Canadian gasoline and diesel had to contain 5 per cent ethanol. In 2008, he appointed he appointed Teneycke as communications director.

The ambitious 38-year-old lobbyist has moved on now. He is vice-president of Sun News Network. Corn Cob Bob has vanished.

Read more

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

The federal government’s foreign-takeover policy is moving into uncharted territory. The application by CNOOC Ltd. for approval of its proposed acquisition of Nexen Inc. has just been filed, but it had already emerged as a matter of international diplomacy. In these circumstances, the government’s retreat from clarification of its foreign-investment policy, and of the meaning of “net benefit,” should be reconsidered.
 
Clarity was promised after the rejection of the controversial application of BHP Billiton in its attempted takeover of Potash Corp. of Saskatchewan Inc. Evidently, the government then found it hard to articulate foreign-investment principles and reverted to a case-by-case approach. Recent statements by Stephen Harper, the Prime Minister, and Christian Paradis, the Minister of Industry, raise an inference that in some instances Canada may want to set some of these applications in a much broader context.

The Chinese government has a controlling interest in CNOOC, but the company is traded on the New York Stock Exchange; it has its fair share of Canadian shareholders. The Canadian government is eschewing talk of a direct linkage of the CNOOC application to broader access to the Chinese economy, but is nonetheless canvassing the concepts of leverage and reciprocity.

Read more

Founded in 1928, Canadian Business is the longest-publishing business magazine in Canada.

If you applied Murphy’s Law to the oilsands, the result would look a lot like Long Lake. The oilsands project was predicated on a novel Israeli-developed gasification process intended to reduce the project’s natural gas consumption. Now that natural gas has become dirt cheap, the benefits of this technically challenging approach hardly seem worth the effort. Long Lake’s startup in 2008 was delayed nearly six months, and it has lagged well behind schedule ever since.

The anticipated flood of 72,000 barrels per day turned out to be more of a trickle. (During this year’s first quarter, it reached 34,500 barrels per day.) The cost overruns were horrendous even by Fort McMurray standards. Long Lake is, in short, the Florida swampland of Alberta’s oilsands region. All of which prompts the question: Who’d want to buy it?

On July 23, the China National Offshore Oil Corp. (CNOOC) revealed its offer to purchase all shares of Long Lake’s majority owner, Nexen. It’s prepared to pay dearly: at 61% above the share price, the premium is roughly double the average in Canadian acquisitions. That’s likely sufficient to dissuade others from bidding. (CNOOC is nothing if not determined: it already owns Nexen’s former partner at Long Lake, Opti Canada, having bought that insolvent company last year for $2.1 billion.) Fortunately for CNOOC, Long Lake is actually something of a sideshow: most of Nexen’s assets lie outside Canada—in the U.K., Yemen and the U.S.

Read more

The National Post is Canada’s second largest national paper.

OTTAWA  – It all comes down to process and benefits. And that’s where the debate over Canada’s foreign investment policy gets messy — and sometimes nasty.
 
The start of Ottawa’s review of a bid by China’s state-owned energy company for Nexen Inc. has sparked another round of political acrimony over who should ultimately control Canada’s resources and who stands to gain or lose.
 
China National Offshore Oil Co.’s proposed $15.1-billion takeover of the Calgary-based oil-and-gas producer has, like others before it, renewed calls for a more open process in reviewing such deals and determining their “net benefit” — a term that has been around as along as the 1985 Investment Canada Act itself, but one rarely explained or understood.
 
Industry Minister Christian Paradis, who on Wednesday confirmed that CNOOC had formally applied for approval of the Nexen takeover, now has 45 days to review the bid under the act, with an option to extend the process by another 30 days, before ruling on the net benefit of the deal to Canada.

Read more

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Ottawa, Toronto, Calgary – Kuwait’s state-owned petroleum company has signed a preliminary deal to invest as much as $4-billion in a joint venture with Athabasca Oil Sands Corp. to develop some of its oil sands properties in northern Alberta.

Kuwait’s Ambassador to Canada, Ali al-Sammak, confirmed in an interview that senior Kuwait Petroleum Corp. officials signed a memorandum of understanding earlier this month. A final agreement is expected in October.

“It’s a plus-or-minus $4-billion deal and in October they’ll be coming back to follow up what has been signed,” Mr. al-Sammak said i n a telephone interview. “So we’re doing very good – this proves that we’re good close friends.”

He said Kuwait Petroleum is seeking to diversify its operations beyond the Middle East and to improve its access to oil sand extraction technology, which could be used in its own heavy oil fields.

Read more

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Gillian Steward is a Calgary writer and journalist, and former managing editor of the Calgary Herald. Her column appears every other week. gsteward@telus.net.

Is the Harper government growing increasingly nervous about opposition to its push for massive oil sands development and the North Gateway Pipeline?
 
It would seem so listening to five Calgarians and a wannabe Calgarian from Quebec who were vying for the Conservative nomination for a by-election in the riding of Calgary Centre, home to dozens of oil company towers and one of the safest Conservative seats in the country.
 
They just didn’t sound that confident about the Prime Minister’s tactics for winning the hearts and minds of Canadians outside Alberta. “Alberta needs some friends….We need to get out the message about our industry to Ontario, to the rest of Canada,” former journalist Joan Crockatt told a public forum last week.

Read more

The National Post is Canada’s second largest national paper.

The thick smoke signals sent by Prime Minister Stephen Harper in recent days on the proposed $15.1-billion takeover of Nexen Inc. by CNOOC Ltd. are a warning to the market that a wide range of outcomes is possible.
 
As the Prime Minister correctly noted, Canada’s response to China’s largest overseas takeover offer would have have big implications for the economy. It will also mark a point-of-no-return for the Canadian oil and gas industry.
 
For their part, shareholders, who get to vote on the bid Sept. 20 at a special meeting in Calgary, will likely take the money and run. CNOOC is offering $27.50 a share in cash, or a 61% premium relative to the stock’s value before the bid was launched. Not bad for a company that’s been underperforming for years.
 
Nexen’s leadership is also on board. In a shareholders’ circular on the deal made public Friday, Nexen’s board recommends shareholder approval because it expects the deal to benefit the company, its employees and other stakeholders based on CNOOC’s plan to establish Calgary as one of its international headquarters, keep its management and employees; implement and enhance Nexen’s spending plans, list CNOOC’s shares on the Toronto Stock Exchange, build on existing community and charitable programs.

Read more