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An Alberta oil sands operation. Oil and gas exports and investment in machinery and infrastructure in the oil sands accounted for fully one-third of Canada’s economic growth in 2010 and 2011.JEFF MCINTOSH/The Associated Press

Indian companies are lagging behind when it comes to investing in Canada's giant oil sands but could well start making deals within the next five years, Energy Minister Joe Oliver says.

Mr. Oliver, speaking to Reuters before a visit to Delhi and Mumbai, said Canadian energy industry needs $650-billion in investment over the next decade. Ottawa concedes much of it will have to come from abroad.

To some political consternation in Canada, China is rapidly buying up assets in the tar sands of northern Alberta, one of the world's biggest crude oil deposits. But India – the world's fourth largest oil importer – has yet to conclude a deal.

"I think they realize ... they are certainly behind others, and they acknowledge that," Mr. Oliver said.

"They are looking to Canada now with increasing interest. I can't predict what precisely they'll do, but I'd certainly be surprised that if in five years from now the picture didn't look quite a bit different."

Last month, sources said a trio of state-run Indian oil companies had bid $5-billion for stakes in Canadian oil sands holdings owned by ConocoPhillips.

The bid from the group, which comprises producers Oil and Natural Gas Corp and Oil India Ltd with refiner and retailer Indian Oil Corp, is the first by Indian energy companies for assets in Canada.

Canada is now deciding whether to approve a $15.1-billion bid by Chinese state-owned CNOOC Ltd for oil producer Nexen Inc, which is active in the oil sands.

Some Tories are uneasy about allowing a Chinese state-owned enterprise to buy such assets.

Indian state companies are partly owned by an elected government in what is the world's most populous democracy, and this could help reduce Canadian hesitation about future deals.

Mr. Oliver said he would try to boost Canadian energy exports to India. The government, keen to reduce its export reliance on the United States, is already trying to boost oil sales to China.

Canada exported $1.4-billion worth of natural resources to India last year – including just $4.1-million in energy products – and Oliver said he sees great potential for more trade.

"There is tremendous complimentarity between our two countries. We have these vast resources – oil, gas, minerals, metals and forestry – and India is growing ... there are immense opportunities," he said.

Mr. Oliver – noting that Saudi Arabia and Iran together supply 29 per cent of India's oil – said major importers of crude generally want to diversify their sources of supply to include what he called reliable and stable countries.

But any talk of boosting Canadian oil exports to India will depend in part on how soon new pipelines are built from the Alberta oil sands to ports on the Pacific Coast.

Opposition to one of the proposed pipelines, Enbridge Inc's Northern Gateway project, is steadily growing and there are doubts as to whether it will ever be built.

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