The majority of Albertans do not think it is acceptable for Chinese companies to have complete control over energy projects in the province or for firms under Beijing’s control to invest in the oil patch, according to a new survey.
The University of Alberta’s China Institute found 64 per cent of Albertans disagreed with the statement that Chinese investment in the form of full ownership is acceptable. Fifteen per cent of survey respondents agreed, while 21 per cent were unsure. Further, 53 per cent of the survey’s 1210 respondents do not think it is acceptable for companies operated by the Chinese government to invest in Alberta’s energy sector. Twenty-four per cent of the survey’s participants said it was acceptable while 23 per cent sat on the fence.
The findings come as Canada reconsiders how to evaluate investments from foreign companies under control of their home state. But while the government clarifies its rules, the oil patch is begging for outside investment because Alberta’s natural gas and oil sands reserves are too vast and too expensive for energy producers to develop without help from outsiders, and China in particular.
“There’s a protectionist streak amongst Albertans…The idea that natural resources would be owned by foreigners strikes that chord,” China Institute director Gordon Houlden said in an interview Wednesday. “It is a fairly universal thing – things that come out of the ground, [people] seem to be protective of as opposed to other sorts of companies.”
Albertans, however, are more at ease with China than other provinces, he said.
Albertans have always been suspicious of outsiders when it comes to natural resources and land, Mr. Houlden noted, citing Canada’s National Energy Program in the 1980s and construction of the Canadian Pacific Railway in the late 1800s as examples.
“I think it could be a deterrent to foreign investment,” he said. “For big investments, investors want to feel welcome.”
The survey took place before China’s CNOOC Ltd. offered $15.1-billion for Nexen Inc., marking China’s largest and most controversial move into Canada. The federal government is currently reviewing that deal, determining whether it would be a “net benefit” to Canada. While the answer is due soon, the Tories on Friday squashed a bid from Petronas, Malaysia’s state-owned energy company, for Progress Energy Resources Corp. Sources say the federal government was not ready to issue its decision, but Petronas would not agree to extend the review period. Petronas and Progress are now in Ottawa trying to resurrect the deal.
It is widely believed the CNOOC-Nexen deal dragged on Petronas and Progress’ review process. CNOOC is controlled by Beijing, although slices of the company trade certain on stock exchanges, and it pledged to list the subsidiary in Toronto.
China’s largest national oil company, PetroChina, owns 100 per cent of the MacKay River oil sands project, and it is expected to increase its stake in the Dover project to 100 per cent later as it passes regulatory hurdles. Sinopec, China’s second-largest state-owned energy company, owns all of Daylight Energy Ltd.
The telephone survey took place between July 3 and July 18. CNOOC and Nexen announced their union plans July 23. Shareholders approved the deal and the Alberta government expresses support for foreign investment, although it will not speak directly about specific transactions.
With a sample size of 1210 people weighted according to population estimates for 2011, the estimated sampling error at the household level is plus or minus 2.8 percentage points at 95 per cent confidence, the China Institute said.