CNOOC

Sat, 2013-02-16 10:00Ben Jervey
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Oil Aboard! Tar Sands Industry Eyes Nexen Rail Alternative to Stalled Pipelines

Facing enormous opposition to the proposed Keystone XL and Northern Gateway pipelines, Canada’s tar sands industry is taking to the tracks to get its sticky bitumen to China. Canadian and Chinese oil companies have explored the “pipeline by rail” option for years now, but over the past month, the prospect of tar sands trains has taken a few big steps closer toward reality.

For over a year, Calgary-based Nexen, Inc. has been developing plans to load tar sands crude onto trains for transport to the West Coast, where it would be loaded onto barges and shipped to China. Late last month, the Canadian government approved the sale of Nexen to a nationalized Chinese oil company, and earlier this week, the U.S. government, which has some say because of Nexen’s major operations in the Gulf of Mexico, gave its stamp of approval.  According to Nexen, the company now has “all the requisite approvals” and the deal “is expected to close the week of February 25, 2013.” (So much for Canadian tar sands benefiting Canadians first and foremost.)

Rail is considered more and more appealing to industry insiders as numerous plans to ship tar sands crude by pipeline have grown increasingly controversial and have been stalled by climate and private property activists from British Columbia to New England to Nebraska. (See: the Keystone XL, the Northern Gateway, and Trailbreaker/Enbridge Line 9.)

In fact, the industry is growing desperate to find ways to export the heavy Canadian crude, as export pipeline capacity is currently maxed out, causing a glut in supply in Alberta, which is driving down prices and causing, according to the Globe and Mail, “billions in forfeited revenues.”

Fri, 2012-12-07 17:21Carol Linnitt
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Harper Government Approves Foreign Acquisition of Nexen, Progress Energy, Affirms FIPA Concerns

Today Prime Minister Stephen Harper announced the approval of two major acquisitions of Canadian energy companies by foreign state-owned enterprises. The Chinese National Offshore Oil Company (CNOOC) will commence the $15.1 billion takeover of Nexen Inc., a Canadian company with major holdings in the Alberta tar sands. Malaysia's Petronas will proceed with the purchase of Progress Energy Resources Corp., a Calgary company with considerable shale gas plays in British Columbia, for $5.2 billion. Petronas has plans to construct an $11 billion liquified natural gas plant in Prince Rupert to prepare gas exports for Asia. 

Prime Minister Harper announced the takeovers, which are steeped in controversy, in tandem with new takeover guidelines intended to address growing concerns of foreign ownership of Canada's resources by energy-hungry nations. He remained silent on the significance of the approval for FIPA, the Foreign Investment Protection and Promotion Agreement, also known as the China-Canada Investment Treaty.
 
“Canadians generally and investors specifically should understand that these decisions are not the beginning of a trend but rather the end of a trend,” said Mr. Harper. The full meaning of that statement, however, remains to be seen. The Harper government's decision to ratify FIPA may mean deals done with China, like today's deal with CNOOC, will carry a new significance.
 
The government previously raised the threshold for official review of foreign takeovers from $330 million to $1 billion, signaling open arms to potential foreign investors with an eye on mega projects like the Alberta tar sands. However, today that threshold was returned to $330 million for state-owned enterprises.
 
“To be blunt, Canadians have not spent years reducing ownership of sectors of the economy by our own governments only to see them bought and controlled by foreign governments instead,” Mr. Harper said
Thu, 2012-10-18 10:34Carol Linnitt
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China-Canada Investment "Straitjacket:" Interview with Gus Van Harten Part 2

This post is second in a series on the Canada-China Investment “Straitjacket:” Exclusive Interview with Gus Van Harten. You can read Part 1 here and Part 3 here.

Right now Canadians stare down the barrel of a 31-year long legal trade agreement with the Chinese government that did not become public knowledge until September 26, 2012.

The trade treaty, known as the Foreign Investment Protection Agreement or FIPA, has garnered notable opposition in the past three weeks, with NDP trade critic Don Davies calling for public hearings, Green Party MP Elizabeth May calling for an emergency Parliamentary debate, and campaign organizations Leadnow.ca and SumofUs.org gathering over 39,300 opposition signatures (and counting) to deliver in person to Ottawa.

Yesterday, the Canadian Press reported the Harper government's refusal to host public hearings. Elizabeth May's October 1 request was also denied on the grounds that FIPA does not meet the test of emergency.

The trade agreement, or treaty, as it is called, is slated for ratification at the end of this month. The Commons trade committee will be briefed on the document in a one hour hearing.

With a trade deal that threatens Canadian sovereignty looming on the horizon and a government committed to expediting its approval, DeSmog caught up with trade investment lawyer and Osgoode professor Gus Van Harten to talk through some of the details.

Wed, 2012-10-17 14:23Carol Linnitt
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China Investment Treaty "a Straitjacket" for Canada: Exclusive Interview with Trade Investment Expert Gus Van Harten

This post is the first of a series on the Canada-China Investment “Straitjacket:” Exclusive Interview with Gus Van Harten. You can access Part 2 here and Part 3 here.

I recently picked up a copy of Francis Fukuyama's 2011 book, The Origins of Political Order. Sitting on the bedside table at the house I was staying at, the book made for some 'light' bedtime reading. I heaved the enormous tome onto my lap and, opening it to a random page, read this alarming passage: 

There is no rule of law in China today: the Chinese Communist Party does not accept the authority of any other institution in China as superior to it or able to overturn its decisions. Although the People's Republic of China has a constitution, the party makes the constitution rather than the reverse. If the current Chinese government wanted to nationalize all existing foreign investments, or renationalize the holdings of private individuals and return the country to Maoism, there is no legal framework preventing it from doing so (Pg 248)

My concerns with China's treatment of foreign investments arose in light of China's recent bid for Nexen, a Canadian company with large holdings in the Alberta tar sands. Since Canada is having trouble with the management of the tar sands now, what would it look like if we had Chinese state-owned enterprises like the Chinese National Offshore Oil Company (CNOOC) in the mix?

It turns out the problem is of magnitudes greater than I had originally conceived, and concerns not only Canada's management of its resources, but its sovereignty, its democracy, and the protection of the rights and values of its citizens.

Perhaps most strikingly, Canada is embracing this threat, showing telltale signs the real culprit in this dangerous deal isn't China at all.

In order to untangle the web of an international trade deal as complex as the China-Canada Investment Treaty, which establishes the terms of the Nexen deal - the biggest overseas takeover by a Chinese company -  I spoke with Professor Gus Van Harten of Osgoode Law School, an expert on foreign investment deals of this sort.

Below is Part 1 of our interview:

Thu, 2012-10-11 10:45Carol Linnitt
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Foreign Funding? So Glad You Asked: Enbridge Renews Attack Against Canadian Environmental Groups

Enbridge recently launched a renewed attack on Canadian environmental organizations, demanding the panel overseeing the Northern Gateway Pipeline hearing squeeze funding information from the project's critics.

In early 2012, a campaign - coordinated by the conservative government, the oil industry and the astroturf Ethical Oil Institute - sought to undermine the credibility of groups opposing the pipeline by suggesting they are “foreign interest groups” that “threaten to hijack our regulatory system to achieve their radical ideological agenda” as Natural Resource Minister Joe Oliver so forcefully put it.

Now Enbridge is renewing that egregious attack by requesting the panel investigate funding granted to Canadian environmental groups from a number of prominent American foundations renowned for their work in social and environmental equity, including poverty reduction, aboriginal issues, conservation, resource management, international development, and children and peace initiatives.

But Enbridge's ploy to redirect public attention away from tar sands, pipeline and oil spill issues toward the meddling of foreign interests in Canadian affairs is misguided, to say the least. The lion's share of foreign funding that guides the Canadian resource economy does not come in the form of conservation or environmental efforts: it comes through foreign investment in the resource sector.

And in the instance of the tar sands and related pipelines, foreign investments can be a politically, environmentally and socially dangerous affair.

Tue, 2012-09-25 07:00Carol Linnitt
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Exporting Canada's Oil Means Exporting Canada's Jobs: Why the Enbridge Pipeline Threatens Canadian Economic Security

The arguments in favor of the Enbridge-proposed Northern Gateway Pipeline often stress the economic benefits the pipeline will bring to Canada. Economists and trade organizations emphasize the advantages of increased production in the tar sands for Albertans and the jobs produced during pipeline construction for British Columbians. Another supposed economic bonus is to come from strengthened trade relations with China, the largest foreign investor currently involved in Canada's tar sands.

Yet as the current National Energy Board hearing takes place, a new message is surfacing, and it's not of the 'economic boon' ilk. According to a number of analysts, energy experts and even industry players the pipeline will export more than just Canadian crude: it will also be shipping off Canadian jobs. And that, they say, coupled with China's growing stake in the tar sands, is by no means in Canada's long term economic interest.
 
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