The acquisition by the state-controlled PetroChina Co. Ltd.'s of 100 per cent of the MacKay River oil-sands project is a vivid reminder that the federal government's review of Investment Canada's foreign-takeover criteria has not yet been issued – more than a year after the messy episode in which BHP Billiton was not allowed to proceed with its bid for Potash Corp. of Saskatchewan Inc.
In fact, Tony Clement, who was then the minister of industry, approved this same PetroChina acquisition two years ago – because the transaction already included an option to turn a 60-per-cent interest into sole ownership, and it was Athabasca Oil Sands Corp., not PetroChina, that exercised its option – to sell, that is.
The government has sent mixed signals over the years. In 2007, it introduced new rules for state-controlled foreign companies so that they would do business on commercial principles, rather than as agents of their home country's policies. And in the 2008 election, the Conservatives said they would not permit export of bitumen from the oil sands for processing elsewhere – which might be justifiable on commercial grounds. On the other hand, the proposed Northern Gateway Pipeline, which the government favours, would facilitate the export of that same bitumen to China.
In June, after two delays in the Investment Canada review – but apparently not because of those delays – PetroChina withdrew from a joint venture in British Columbian natural gas. The Chinese company seems to have decided the price was too high. Even so, the government's processes may have given PetroChina time to think better of it.
The MacKay River project is of course only one of many in the Alberta oil sands – unlike Potash Corp.'s dominant position in Canadian potash mining, which evoked so much nationalism and populism in 2010. And PetroChina remains obliged to do business in Canada as a commercial corporation, not as a state agency. But Christian Paradis, the Minister of Industry, should act soon to provide the promised clarity about what Canada expects from foreign investors.