Oil and Gas Sector-Politics and Image

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

As premiers gather in Halifax this week, the divide between Alberta, British Columbia and Saskatchewan over the spoils of energy development is growing. B.C. is demanding its fair share of benefits from oil pipelines cutting through the province and Saskatchewan has got to be nervous that Alberta’s oil sands production is going full tilt, pushing down prices for its conventional crude because there’s not enough pipeline space to move both.
 
All this makes talk of a national energy strategy, championed by Alberta and expected to be one of the main topics of discussion at the Council of the Federation meeting, naïve at best, explosive at worst. Given Canada’s bad experiences with central planning in energy, Alberta’s Premier, Alison Redford, and the strategy’s diverse cheerleaders, should have seen it coming.

The rift between Alberta and British Columbia over the proposed Northern Gateway pipeline cracked wide open this week and a quick fix is unlikely. In fact, it could be all downhill from here if the anti-Northern Gateway NDP gains power in the coming provincial election, as polls suggest.
 
“There is no way this pipeline is going to happen without B.C.’s approval,” Premier Christy Clark told CBC Radio from Halifax Tuesday.

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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.

Edmonton and Halifax — A standoff between premiers has left the proposed Northern Gateway pipeline in peril, with Alberta Premier Alison Redford saying she won’t share any resource revenue and B.C. premier Christy Clark saying she’ll block the project without more cash.

Speaking Tuesday morning at an annual pancake breakfast at the Alberta legislature, Ms. Redford rebuffed B.C.’s day-old demand that more money – an unspecified “fair share” – be included if it’s to support the proposed $6-billion pipeline, which would carry Alberta oil to the B.C. coast for shipment to Asia.

“We will not share royalties, and I’ve seen nothing else proposed, and would not be prepared to consider anything else at this point in time,” the Alberta premier said.

B.C. Premier Christy Clark said she was taken aback by the comments, and repeated that Northern Gateway won’t go through without a slice of royalties. “If Alberta is not willing to even sit down and talk, then it stops here,” Ms. Clark vowed.

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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.

Stephen Harper won’t stand in the way of Beijing’s biggest-ever foreign investment, a $15.5-billion (U.S.) bid unveiled Monday for Calgary-based oil producer Nexen Inc. by China’s state-owned Cnooc Ltd., or China National Offshore Oil Corp. Indeed, the Canadian prime minister will be applauding.
 
If Athabasca is rivalled only by the Middle East in its vast oil reserves, the world’s top creditor nation has its own vast resources — of cash — that Harper is eager to tap. Chinese firms already have pumped $17 billion into North American oil and gas plays since 2010. But there’s at least another $2 trillion of acquisition firepower where that came from.

The Cnooc embrace also puts muscle into Harper’s warnings to Washington that Canada is ready to redirect its oil exports to Asia if the U.S. balks at, say, the proposed Keystone XL pipeline that Calgary’s TransCanada Corp. proposes to build across the length of the U.S.

U.S. President Barack Obama has crossed swords with Ottawa with his one-year moratorium on the Keystone XL megaproject. That delay prompted Harper to turn up the volume on his kind words for China.

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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.

Welcome to the future. Chances are you’d never heard of Nexen or CNOOC before yesterday. But the $15.1-billion proposed takeover of Nexen by a huge state-owned Chinese oil company shows the way the world is going. We are seeing major new alliances that would have been unthinkable just a decade ago.

The deal has yet to be approved by Ottawa. But it plays right into Stephen Harper’s strategy of maximizing our opportunities as a global petro-power. Canada needs the Chinese and they need us, and it looks like everyone will wind up a winner – everyone, that is, but the large army of doomsayers who think the energy boom is stealing our soul.

Nexen has huge ambitions, but it’s a global pipsqueak. Like the industry as a whole, it needs enormous infusions of capital to realize its potential. The Chinese have huge amounts of money to invest in energy development and they’re scouring the world for opportunities. Their time horizon is very long. Canada is safe and secure – and also technologically advanced. For them, this is a no-brainer.

CNOOC is not the Politburo dressed up in pinstripes. It’s listed on the New York Stock Exchange.

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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.

China is taking a historic step toward its ambition to become a global resources powerhouse with a $15.1-billion (U.S.) bid to buy Calgary-based oil producer Nexen Inc.

The bid by state-backed CNOOC Ltd. is the largest by a Chinese firm for a foreign company, and confirms that Canada has become a proving ground for China’s rise in the global economic order as it deploys some of its trillions of dollars in foreign reserves to secure strategic resource properties around the world.

The deal builds on a string of previous acquisitions by Chinese firms in Canada’s oil sands. It would be the second-largest deal ever in Canada’s energy sector and, if approved, the sixth-largest takeover ever in Canada. Though it may test the Harper government’s stance on foreign ownership, two years after it blocked a $39-billion (Canadian) takeover offer for Potash Corp. of Saskatchewan Inc., there are strong indications that the deal will be approved.

For one, CNOOC, China’s third-largest oil company, has cultivated relationships with top players in Ottawa in recent years.

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

Prime Minister Stephen Harper has been telling China that Canada welcomes its investment. Yet CNOOC Ltd.’s bid to purchase Canadian oil major Nexen Inc. for US$15.1-billion ($15.4-billion) pushes his government to a fork in the road, and its choices will have major implications for the country.
 
If Ottawa approves the bid, it makes good on its rhetoric and fends off the bad odour from its rejection of Australian miner BHP Billiton Ltd.’s hostile $39-billion bid for Potash Corp. nearly two years ago. However, make no mistake, it will make it hard to reject the takeover of other Canadian oil and gas ‘champions’ with depressed share prices that since the BHP/Potash saga have been seen as off limits, such as Encana Corp., Talisman Energy Inc. and Canadian Oil Sands Ltd., leaving Canadians with even less ownership and less control of an industry that is supposed to be the engine of their economy.
 
If Ottawa rejects the bid, it contains the selloff but loses credibility with investors and offends China, which Canada needs as a market for its oil and gas to reduce its dependence on the United States.

With CNOOC’s offer, China seems to be cleverly accommodating and even exceeding Canada’s foreign investment requirements, leaving little room for Ottawa to say no. Indeed, in interviews yesterday, CNOOC’s top executives said they are confident the deal will meet the “net benefit” test under the Investment Canada Act, even if formal discussions with Ottawa have not yet started.

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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.

TORONTO and OTTAWA — British Columbia Premier Christy Clark is warning that the environmental risks associated with a plan to sell Canadian oil to Asia through the Northern Gateway pipeline outweigh the economic benefits, leaving her at odds with the federal and Alberta governments.

Ms. Clark conveyed her concerns about the project during a series of high-level meetings, beginning with a telephone call to Prime Minister Stephen Harper on Thursday. She met face-to-face the same day with Saskatchewan Premier Brad Wall in Saskatoon and Alberta Premier Alison Redford in Edmonton.

Ms. Clark gave them a heads-up on changes her government is seeking, before Canada’s 13 provincial and territorial leaders meet this week in Halifax, where the pipeline project will be on the agenda, her press secretary, Michael Morton, told The Globe and Mail.

Until now, Ms. Clark has not taken a stand on the project. The proposed $5.5-billion pipeline plays a key role in Mr. Harper’s ambition to feed Canadian resources to customers in Asia. Mr. Harper has said it is vital for Canada to reassess its reliance on U.S. markets for energy, and look to Asia. Almost all of Canada’s oil exports go to the United States.

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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 – Nexen Inc. has agreed to a $15.1-billion (U.S.) takeover by Chinese oil producer CNOOC Ltd., marking the most important acquisition to date by an Asian firm in Canada.

The all-cash deal is worth $27.50 per Nexen share, a 66-per-cent premium to the 20-day volume-weighted average for the company, which has not seen its shares reach that level since before the financial crisis. Nexen closed at $17.06 Friday.

Nexen is Canada’s 12th-largest energy company, producing 213,000 barrels of oil equivalent per day. But the company has struggled in recent years as its corporate pillars each faced problems. Its North Sea production was hit by a new U.K. tax scheme. Its Gulf of Mexico drilling was hurt by the BP oil spill. Its West African offshore production was hit by a costly drill well. It was forced to abandon a major project in Yemen after a production sharing contract expired there. Its oil sands ambitions were hampered by problems at Long Lake, where problems with underground geology have so far kept it far from reaching its planned output.

Long Lake, however, served as a springboard to the corporate takeover. Last November, CNOOC completed a $2.1-billion buyout of OPTI Canada Inc., which held a 35-per-cent stake in the project, which is still operating at less than half its design capacity years after it began operation.

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

CALGARY —  The quick rise of tight oil in the United States and Canada is dominating oil patch chatter as players take stock of what it could all mean — are we on the verge of a global energy revolution, or on a trend that is encouraging, but unlikely to meet lofty expectations?  Tight oil is unconventional oil resources extracted by horizontal drilling and fracking technologies.
 
With production in the United States gushing out of the Bakken and lots of potential in the Eagle Ford and 20 other plays, Canada barely getting warmed up, and other countries looking to copy the North American experience, optimists envisage the biggest game changer for the energy sector in decades.

By offering North America a shot at energy independence, there’s talk of vast political implications, including a new U.S. foreign policy free of Middle East strings and less urgency to find/subsidize alternative fuels. Some argue the growing importance of tight oil could even shine a new light on Canada’s oil sands in the eyes of Americans because they make energy independence achievable.
 
Robin West, chairman and chief executive officer of PFC Energy, a global consulting firm that specializes in oil and gas, has gone as far as branding the shift as the energy equivalent of the fall of the Berlin Wall.

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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

It made for a dramatic photo op when federal Environment Minister Peter Kent and his counterpart in Alberta, Diana McQueen, swooped in via helicopter this week to check out some of the new oil sands monitoring sites in northern Alberta. The new stations are the result of a joint federal-provincial plan announced in February to sharply beef up the scientific study of the cumulative effects of oil sands development on water, air, land and biodiversity.
 
The two levels of government deserve praise for moving ahead with a system that will examine many more sites, more frequently, and look for a much broader number of contaminants than ever before. Compared to the inconsistent and haphazard testing in the past, the new program is a huge improvement.

Still, there is more to be done, and the expansion of monitoring needs to be sped up. Already the program is long overdue. Despite years of claims by industry that the oil sands were being developed in a sustainable manner, report after report noted that there was little scientific evidence to support this and insisted that far more data needed to be gathered.

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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 – The Bank of Canada is adding the downward drift in prices for oil and other commodities to its catalogue of threats to economic growth.

In a one-page statement on his latest interest-rate decision Tuesday, Governor Mark Carney mentioned oil or commodity prices four times. To many economists and analysts, this was a clear hint of growing concern as oil prices, while still historically high, inch downward to $80 (U.S.) a barrel – considered an unofficial breaking point at which investment in energy projects could stall, putting jobs at risk.

Mr. Carney, who left his main interest rate at 1 per cent Tuesday and will release a full quarterly forecast on Wednesday, noted that the “sizable reduction” in commodity prices owing to slower global growth is keeping inflation in check and could mean cheaper gasoline well into next year. However, he also cut his 2012 and 2013 projections for the economy, in part because the consumption and business investment he is counting on to drive growth will be held back by “the effects of lower commodity prices on Canadian incomes and wealth.”

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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 former managing editor of the Calgary Herald. Her column appears every other week. gsteward@telus.net

NDP Leader Tom Mulcair strode into the heart of Calgary last week wearing full cowboy regalia — white hat, blue and white plaid shirt (with just a hint of orange), a huge bronze belt buckle (under a bit of a paunch), jeans and black boots.
 
With his beard he looked more like a grizzled range rider than Stephen Harper ever will. The Quebec MP was even pronounced the best-dressed politician at the Stampede by a keen observer of cowboy fashion.
 
“He seems to have nailed it with a good western outfit and he looks like he belongs, looks like he’s stepping into the role,” said Brian Guichon, owner of Riley & McCormick Western Stores. Guichon named Harper the runner-up for his outfit, which was topped by a black hat. Mayor Naheed Nenshi garnered third place. During his short visit Mulcair showed that he had much more going for him than an acute fashion sense.

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